res_10285 - Laserfiche WebLink

Home

TWIN LAKES, Roseville, Minnesota Market Assessment & Demand Analysis Office Market Assessment . Based on the current and projected suburban market environment, it is reasonable to assume that the larger Northeast Sector has the potential to capture between 16% and 18% of regional office space absorption over the coming five-year period. On this basis, we estimate 5-year absorption for the Northeast Sector of approximately 1,200,000 to 1,575,000 square feet (120,000 to 157,500 sfper year). . Based on the current vacancy rate, it appears that the submarket has approximately a three to four-year supply of office space, since another 475,000 square feet must be absorbed to bring the current 14% vacancy rate down to equilibrium at 7%. However, it is important to make the point here that there will clearly be opportunities for new office construction in this market during the coming five years. New buildings will have a strong competitive advantage in attracting tenants as compared to space currently available in older office buildings. Meanwhile, tenants in older buildings will seek out opportunities to move-up to newer high-quality office space, thereby freeing-up older, perhaps more affordable space for other firms moving into the market. An example of this "flight to quality" within the submarket is the Broadway Ridge facility, which has a vacancy rate of just 0.5% today. . From our review of office market data and current and projected trends, it is clear that the regional office market has entered a period of recovery, and that the subject sub- market is currently performing favorably in the metro area. Immediate demand is ( likely to be from small firms in the professional and business services sector. Therefore, we endorse the developers plan to construct the 25,000 to 30,000 square feet of office space in the office/retail buildings on Twin Lakes Parkway in the short- term. Meanwhile, we also concur with the plan to construct a multi-story 150,000 to 175,000 square foot office building on the site on a build-to-suit basis for a corporate user or as a multi-tenant facility. Construction timing for this building should be market-driven. The subject site is an attractive one for such a building, offering good access to 1-35 and supporting development and business clusters. GV A Marquette Advisors Page 56