Vacancy rates dipped at year-end to 5.1% from 6.9% in 1999, according to recent a market report by United Properties.
An impressive 1.7 million sf was space was absorbed by retailers, and a splurge in new development anchored by SuperTarget, Sam's Club and big supermarkets, isdriving further development this year, says Mike Scott, a retail broker with Bloomington, MN-based United Properties. For instance, Lunds supermarket is anchoring Plymouth Marketplace, a 96,000-sf shopping center in Plymouth. The project, which is beingdeveloped by North American Properties and marketed by United Properties, is expected to open in June.
Interestingly, SuperTarget appears to be trying to get a leg up on Wal-Mart Supercenters, which is building stores around the Twin Cities in Rochester and Mankato, but none in the metropolitan area. Likewise, Sam's Club is doubling its store count to eight ornine as Costco attempts to regain a foothold in the Twin Cities.
Target is aggressively expanding SuperTarget, its supermarket-discount store format, and they some nine new stores in the Twin Cities. Two are now under construction in Minnetonka and Shoreview.
The total shopping center market stayed at an estimated 48.2 million sf, but it should be noted the numbers do not reflect the self-development of stores by Target, Home Depot and Menards.
Like in 1999 and 2000, new construction is restrained as an estimated 2.2 million sf of retail space under construction, about two-thirds of that new and one-third expansion, according to Minneapolis-based Colliers Towle.
Given the slowing economy and building glut of space in office and industrial sectors, retail has proved fairly robust, Scott says.
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