Commercial Property & Real Estate News

With vacancy rates down, rental rated up, and dollar value transactions soaring at the the end of 2016, forecasters see good times ahead in Minneapolis for investment in the apartment market. They also see a definite swing toward value-add development, with a continued demand for more apartment units despite record-breaking volume over the previous three quarters.

Trends in Supply & Demand

Local trends for Minneapolis-St. Paul-Bloomington mirror what's happening throughout the country, with apartment supply in 2016 placing the area 34th among the nation's top 50 markets. Houston and Dallas-Fort Worth continue to rank as the country's hotspots, with Austin, Texas not far behind. New construction is expected to reach record levels once again.

As the owner of property for lease or rental, there are advantages of offering a triple net lease (NNN) to prospective tenants. The actual rental dollars received from a triple net lease arrangement might be lower than the market average, but the advantages in terms of cash outlay for expenses such as taxes, utilities and maintenance can constitute great value over the long term.

So as a lessor, is a triple net lease option worth considering?

If you own older warehouse property, or are looking at a building that requires updating, here are 5 reasons to consider a triple net lease arrangement, and some important ways to make it work for you. 

1. A Lower-Than-Market Lease Rate

A lease under market average might be just the ticket for a

After approximately two years on the market, the sale of the Sheraton Midtown Hotel was announced in late November, but at a price substantially below the asking price.

The Contract

The contract, for $9.99 million, was to a Qatar-based real estate affiliate of Al Qamra Holding Group, although the listing price of the property was $15.3 million when marketing efforts began in 2014, according to Minneapolis/St. Paul Business Journal. And the sale comes with strings: a $2 million plus renovation is required under separate licensing agreement with Marriott International, the "custodian" of the Sheraton brand.

What Does This Mean for Minneapolis?

Does this bode well for other high-profile commercial projects in Minneapolis in 2017? 

Are

As a commercial investor, whether you have a single office building or a portfolio of residential rental properties, you know that the key to success and profits is to keep your occupancy rate high. 

Look to green improvements and the addition of smart technology as features that will help you attract long-term tenants to your office buildings, small retail spaces and rental apartments. Even modest expenditures will pay big returns in terms of leasing and tenant satisfaction. If you're remodeling, the choices you make will largely determine your building's desirability. Make decisions that benefit the client whenever possible. Individual thermostats and ample electric wiring for all electronics are much appreciated!

Keep Things Looking Fresh

Mini warehouses are a great way to establish an income stream while preserving the ability of commercial or industrial land to realize its full value potential, or for surrounding development to "catch up".

With minimal cash, an investor can build valuable equity as well as realize substantial cash flow.

Is this a viable way to build a portfolio? Many investors believe it is.

Market Performance

In 2011, according to U.S. News & World Report, self-storage was the prime real estate investment trust segment, with a whopping 35.2 percent total return. At the same time, the stock market took a real hit, and other real estate varied from flat to slow as investment options. 

But what about the state of that investment as the economy improves and

They're popping up all over the country. From Austin to New York City, Peoria to Poughkeepsie, and Sarasota to Seattle, co-working spaces and shared offices are just about the hottest item in commercial real estate.

Finding Your Space in Minnesota

Minneapolis-St. Paul is no different. Numerous new entries in the market cater to a wide variety of users, from artists who share studio space to freelance writers who like to share a bottomless coffee pot with other solitary workers.

It's a trend that bears some similarities to the "executive suites" or seminar and meeting room rental facilities of previous decades, but with a decidedly modern twist.

While most offer some shared facilities like conference spaces and coffee rooms as well as

There are a lot of opportunities in Minneapolis/St. Paul to rehab smaller commercial buildings and strip centers, turn older homes into modern office buildings, and generate income from four-unit apartment buildings.

Starting small may be the path toward large-scale investment or you may find that you enjoy the relative simplicity of small-scale investment.

You can reap big dividends by investing minimal cash, as long as you allocate sufficient time and energy to the learning curve. However, know that a real estate empire cannot be built overnight. Learn patience - there is no substitute for due diligence. If your goal is to build an investment portfolio that includes rental property, the best way is to start with small steps on the path to your