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Twin Cities Shopping Center Development Slows

MINNEAPOLIS-Brokers say this will be good for lease rates as rising demand and high

By Jim McCartney | Updated on October 05, 2000

MINNEAPOLIS-New retail construction in the Twin Cities is slowingdown and brokers anticipate that the vacancy ratewill dip slightly to 5.4% or so next year.

“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.

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