Commercial Property & Real Estate News

In the Twin Cities today—and for the foreseeable future—one must look up. Real estate development is going higher and higher, particularly in Minneapolis. That's not only a metaphor for physical growth and rising prices, but it's an observation in a literal sense. High-rise buildings are the new normal throughout the city, not only in the urban core, but now in Dinkytown and uptown as well. And those high-rises are as likely to be mixed-use developments with retail, office space and affordable apartments as they are to be luxury condominiums.

That skyward focus is most likely here to stay, but there is also something new at ground level, if the city's current efforts to deal with population and employment growth trends, transportation needs and

Although the CRE world is never static, there are some mixed signals that deserve closer examination as the new year gets underway. A one-day event planned for March 12 at The Dayton's Project, 700 Nicollet Ave. in downtown Minneapolis, will focus on topics that anyone involved in commercial real estate, building, leasing or development in the Twin Cities won't want to miss.

Touching on topics that range from zoning concerns to modular construction to the effect of tariffs on the cost of materials, individual speakers and panels will consider the hard questions and try to find consensus about how to deal with challenges.

Scheduled speakers will include Shauen Pierce, director of economic development and inclusion policy for the city of

Inventory is down, prices are up, record numbers of permits are being issued. What is going on with both single-family and multi-family housing in Minneapolis? Is this the beginning of a new growth cycle? If so, where will it lead?

New Activity for Housing Starts

According to recent reports, the increase in new permits over the same period last year represents a 15% increase over 2019, for both single-family and multi-family starts. However, based on statistics from the Minneapolis Association of Realtors, there has been a decline in housing inventory of approximately 15%. Housing First Minnesota spokeswoman Katie Elfstrom notes that more families are choosing to build new homes because there are fewer homes currently available on the market,

It's tax season.

Amid the collective groans from business firms and individuals alike, there are also some new standards that will affect private companies and non-profits with a lot of leased space on the books. The new standards are already in effect for publicly held corporations.

Updated standards were originally timed to become effective in December 2019 for all business entities, but the target date for implementation by private firms is now the first fiscal reporting year after December 15, 2020. Even with the year-long reprieve, the change may well be burdensome, according to some tax accountants.

Affected businesses must treat operating leases as liabilities, according to the Financial Accounting Standards Board (FASB), under the new

The commercial real estate world is changing, according to an insightful Deloitte survey of CRE executives. Location, while still important, may no longer be the prime driver of success. Today, tenant experience is at the forefront, say leaders in the field from more than 10 nations. Their assessment may alter the focus of future development.

Here is what to look at for 2020 and beyond.

Rather than focusing on the physical, the new emphasis is on something a bit more difficult to define and analyze. It's an evolution of sorts, based on a 2016 prediction by Deloitte analysts that the "new mantra" for commercial real estate would become a three-legged stool of "location, information, and analytics."

Those same analysts now say the industry has

Sometimes ideas don't play out exactly as planned. When ambitious plans were unveiled more than a decade ago for The Shops at West End in St. Louis Park, it was with hopes that the $400 million mixed-use project would enjoy certain success. The first phase was to be a first-class retail center, followed by apartments, offices, restaurants and hotels.

In 2008, those early hopes were dashed by the looming recession. The initial shopping center has not been a major success. Even today, more than one quarter of the space remains vacant. Other developments planned were subsequently scrapped by Duke Realty Corp., the original developer, a firm that altered its strategy and pulled away from the project in 2011.

But the story didn't end there. Today,

With freak weather occurrences, from hurricanes and tornadoes with associated flooding, to wild fires, blistering heat and prolonged subzero temperatures headlining the news throughout the country, it seems that risk has become the new normal. If that is so, what preparations and precautions are necessary to protect commercial office tenants?

Building codes and energy requirements have become more stringent in the past couple of decades, but weather conditions have also become more challenging. Is there anything Crow Wing building managers can do to prevent damage and assure that business operations will continue, despite what seems like more frequent storms?

The fact is weather conditions in all parts of the world seem to be regularly more

Despite some mixed reports earlier in the year, and the sometimes conflicting assessments of those who track statistics and trends, the end of year forecast for the coming year—across the nation—is relatively bright.

According to Kiplinger's economic outlook, states face challenges on several fronts, but U.S. revenue is on the rise—both from sales of goods and personal and corporate taxes—marking serious and robust growth not experienced since before the Great Recession. That's good news, but the forecast isn't equally encouraging for all states and regions.

Healthy tax revenues are expected to continue for the next several quarters, due to continuing low employment and slowly rising incomes. Coupled with modest inflation and high energy prices,

Once heralded as the undeniable future of business office space and a realistic direction for commercial real estate, the picture of coworking space available and planned for 2020 looks somewhat different from the projections of 2017. Here's a review of what was, what is and what might be coming. The concept of coworking space was introduced in 2005, and it enjoyed a period of rapid growth a decade later. But today, although signals are mixed, the trend seems to be slowing.

Flexible office trends were innovative when first introduced, but by 2018, they were viewed as a "here-to-stay" portion of the office market. At that time, Bethany Schneider, Newmark Knight Frank associate director, wrote in a report that executive office suites constitute a

Even though there were some mixed signals earlier in 2019, the Minneapolis and St. Paul office forecast for the year is expected to remain strong, performing better than the national average. The summer Yardi-Matrix Report provides an in-depth glimpse at local market activity for the first six months of the year.

Key Points of Pride

Although the report notes that year-over-year sales activity was somewhat slower in June, overall the annual gain is expected to exceed 2018's $1.4 billion volume, an impressive achievement. And that's just the tip of the iceberg in terms of good news for the Twin Cities market.

The local market is seen to be strong, no matter what specific numbers are examined:

• Demand for office space remains high;
• Asking