The vacancy rate in the market ended the year at 9.9%, about the same as the previous year. If sublease space is added back, the vacancy rate would be 11.1%, according to the Bloomington, MN-based commercial real estate firm. United expects vacancy rates to stay in the 8% to 9% range as long as demand does not dip well below its expected 250,000 sf to 300,000 sf of absorption.
While developers added 955,430 sf to the West submarket, tenants soaked up 842,358 sf. Also, for the first time, the market has more class A space than class B space, and much of the leasing was done in those class A buildings.
Major new projects include Golden Hills Office Center, 301 Carlson Parkway, Crescent Ridge's second phase and the 1600 Tower. Prudential is marketing its 3033 Campus Drive building at Interstate 494 and Highway 55. The finanical services firm is expected to exit about 150,000 sf of space in the building in the middle of this summer.
After adding nearly 1.7 million sf of new construction in the last three years, the West submarket has no new buildings expected to open until early next year, when 401 Carlson Parkway is expected to open.
Two other office projects on the boards are the second phase of Plymouth Woods Office Center at Highway 55 and Fernbrook in Plymouth, an 86,000-sf project to be developed by St. Paul Properties, and Wayzata Executive Park at Interstate 394 and Gleason Lake Road in Wayzata, a 104,000-sf project proposed by Dunbar. With the drop off in new construction, 2001 will be a year of opportunity for class B and C buildings, United officials say.
Sales were strong in the market as well, as Opus Corp. fetched record prices for each of the two phases of its Crescent Ridge Corporate Center.
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