©2022 Real Estate Publishing Corporation December 2022 • VOL. 38 NO. 5
Development Showcase: Wakpada Apartments Page 29
Demand still high for Twin Cities industrial product. But will rising rates scuttle new developments? By Dan Rafter, Editor
Chaska Creek 1 in Chaska, Minnesota.
D
emand for industrial product remains high throughout the Twin Cities market. The challenge? Rising interest rates are already scuttling several planned industrial developments, something that will make it that much more challenging for end users to find space in this market.
And the brokers working in the Minneapolis-St. Paul industrial market say that the imbalance between demand for and availability of industrial product won’t be evening out anytime soon. But while rising interest rates might slow new construction, vacancy rates and industrial rents continue to rise
in the Twin Cities market as 2022 nears a close. That’s evidence of just how strong the industrial market has been here.
DEMAND (continued on page 14)
Year in review 2022: If it wasn’t COVID, it was rising interest rates and persistent inflation By Dan Rafter, Editor
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ow strong of a year was 2022 for the commercial real estate market in the Minneapolis area? That depends largely on the sector.
Industrial and multifamily? They continued to boom in 2022, with demand for warehouse buildings and multifamily properties soaring throughout the last 12 months.
The retail sector continued to rebound, too, especially in the suburban areas of the Twin Cities market. Retailers learned well the lessons of the COVID-19 pandemic – online ordering, curbside pickup and enhanced delivery services are keys to success – and are applying them today to keep the business coming. But the office sector? That market remained largely in limbo as companies throughout the Twin Cities area con-
tinued to finalize their back-to-the-office plans. And as those plans remained hazy, the vacancies in St. Paul and Minneapolis office properties continued to rise. It’s a trend showing few signs of slowing as 2023 arrives. How best, then, to sum up 2022? It was a largely resilient year in the Twin Cities, even as worries rose along with YEAR IN REVIEW (continued on page 16