"Demand will exceed supply," says Richard Grones, apartner at the Cambridge Group based in Edina, MN andMinneapolis affiliate for Realty Resources.John Johannson, a retail broker with Welsh Cos., saysthat speculative development has been kept to aminimum. Given that the Twin Cities is adding from30,000 to 50,000 people a year to its population base,the supply of new store space is just keeping pace with thegrowing demand.
In part, development is being constrained byconstruction costs, which are "going through theroof," rising at a rate of about 32% a year,Johannson says. He's also concerned about the lack ofconstruction tradesmen, especially since many of themon the job now are 10 to 15 years away fromretirement.
On how much retail space will be added to the TwinCities market next year, there is a difference of opinion between Grones and Johannson. Grones predicts that theretail market will increase by 2.7 million sf, up 5% to 51.1 million sf overall. Johannson'sprognosis is more constrained, expecting only 900,000 sf of new space, adding slightly less than 2%to the market.
Recommended For You
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
