MINNEAPOLIS—The Twin Cities' commercial real estate market has been near the top of the heap for a number of years, and it just reached another milestone. Its vacancy rate across the office, industrial and retail product types just sank below 10%, the lowest in more than 15 years, according to Cushman & Wakefield/NorthMarq's new COMPASS Report.

During the first half of 2016, construction slowed down and more users settled in for the long-term after completing recent development plans. The multi-tenant vacancy rate currently stands at 9.9%. Tenants absorbed a combined 1.76 million square feet over the first six months of the year and developers finished just 463,000 square feet of new multi-tenant space. C&W researchers say much of that was pre-leased or found tenants quickly. “The Twin Cities multi-tenant market fundamentals continued to improve throughout the first half of 2016,” says Mike Ohmes , executive vice president for transaction and advisory services. “Every sector reported positive results, and except for a few pockets of softness, every sector should see continued improvement throughout the balance of the year.” The researchers project that, in the latter half of 2016, the multi-tenant market for all sectors will see between 600,000 and 800,000 square feet of positive absorption. And new multi-tenant deliveries will pick up substantially in the next six months with about 1.67 million square feet of new construction underway and set for delivery by the end of the year. “We also expect that the investment market will continue to charge ahead, with strong appetites for both value-add and stabilized properties,” according to the report. “Sales volume records could fall for both office and multi-family markets, with the multi-family sector already rapidly approaching an all-time-best year.”

MINNEAPOLIS—The Twin Cities' commercial real estate market has been near the top of the heap for a number of years, and it just reached another milestone. Its vacancy rate across the office, industrial and retail product types just sank below 10%, the lowest in more than 15 years, according to Cushman & Wakefield/NorthMarq's new COMPASS Report.

During the first half of 2016, construction slowed down and more users settled in for the long-term after completing recent development plans. The multi-tenant vacancy rate currently stands at 9.9%. Tenants absorbed a combined 1.76 million square feet over the first six months of the year and developers finished just 463,000 square feet of new multi-tenant space. C&W researchers say much of that was pre-leased or found tenants quickly. “The Twin Cities multi-tenant market fundamentals continued to improve throughout the first half of 2016,” says Mike Ohmes , executive vice president for transaction and advisory services. “Every sector reported positive results, and except for a few pockets of softness, every sector should see continued improvement throughout the balance of the year.” The researchers project that, in the latter half of 2016, the multi-tenant market for all sectors will see between 600,000 and 800,000 square feet of positive absorption. And new multi-tenant deliveries will pick up substantially in the next six months with about 1.67 million square feet of new construction underway and set for delivery by the end of the year. “We also expect that the investment market will continue to charge ahead, with strong appetites for both value-add and stabilized properties,” according to the report. “Sales volume records could fall for both office and multi-family markets, with the multi-family sector already rapidly approaching an all-time-best year.”