Vacancy rates in the northwest submarket are rising andlikely to hit 14.2% at year-end, up from 13.3%at mid-year. That rate goes to 15.7% if all of the sublease space is considered, the report notes.
The absorption was a negative 17,887 sf for the year despite no significant newdevelopment coming online. Even so,rental rates have stayed steady across all propertyclasses, according to the report.
Office space users continue to flock to the boomingMaple Grove area, as tenants follow the samepath previously taken by retail and residentialdevelopers. Stronger demand in the Maple Grove areawill help keep vacancy rates fairly steady across thesubmarket the first half of next year, the report predicts.
Some smaller,new developments may occur in the Maple Grove area inthe next year to accommodate growth and more userscoming into the area. But offsetting the tight market in Maple Grove wererising vacancy rates in the Brooklyn Center/BrooklynPark area, where nearly half (700,000 sf) of thetotal inventory of the Northwest office submarketis located.
A slow economy and attendant corporate downsizingfurther pressured property owners of several major BrooklynCenter office buildings to market their propertiesmore aggressively. For instance, health care companyBenesight returned 26,000 sf of space to the market inBrookdale Corporate Center III.
Brookdale CorporateCenters I and II, EBT Office Center and the Quadrant,all in Brooklyn Center, also had abundant spaceoptions available to meet a mix of user needsat year-end.
United analysts anticipate theBrooklyn Center and Brooklyn Park markets willcontinue to soften from a slowdown in demand beingfelt across the Twin Cities market.With overall class C vacancies currently at 29.2%,owners of those properties will become even moreaggressive in their marketing efforts.
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