Retail leases up with Super Bowl bump.
Byline: Matt M. Johnson
Demand for Twin Cities multitenant retail space hit a high point in the fourth quarter of 2017 as the market absorbed 160,000 square feet of space leased and vacancy dropped to a calendar-year low of 6.0 percent. The space filled up as short-term leasing followed Super Bowl LII into downtown Minneapolis, and as an influx of retail chain locations including Burlington Coat Factory, Hobby Lobby and Office Max helped fill big-box spaces left by retailers in financial trouble, according to a retail market report and forecast from the Minneapolis office of Colliers International. Downtown Minneapolis was the best performing retail submarket during the quarter. Pop-up retailers filled almost 0,000 square feet of empty retail space in City Center, IDS Crystal Court, Renaissance Square and the Daytons project, according to the Colliers report. The downtown retail vacancy rate effectively fell to zero, said Tyler Allen, a Colliers senior research analyst. The short-term leases generally run two to four months, he said. In the suburbs, spaces in the 3,000- to 50,000-square-foot range drew leases during the quarter, said Sara Martin, a vice president specializing in retail leasing with Colliers. There were several tenants that were looking for this size space, she said in an interview. Xperience Fitness, which has corporate offices in Eden Prairie and Appleton, Wisconsin, was prolific in signing fourth-quarter suburban leases. It leased 55,000 square feet in the Crossroads of Roseville at 1663 W. County Road B2, 45,53 square feet at Riverdale Commons at 3320 124th Ave. in Coon Rapids, and 40,26 square feet at Apple Valley Square at 15125 Cedar Ave. The company picked up another 44,000 square feet in January at the Northtown Mall in Blaine, Martin said. Xperience took space formerly leased by Gordmans in Roseville and Blaine. The department store declared bankruptcy last March. Xperiences other spaces were formerly occupied by a Kmart and Rainbow Foods. The year ended with 93,000 square feet of retail space absorbed across the Twin Cities. The fourth quarter vacancy rate was well below the six-year high of 7.4 percent in the second quarter of 2012. The lowest vacancy rate during that period was 4.6 percent in the third quarter of 2015, according to Colliers data. Available space came in part from the closures of three Gander Mountain stores in the Twin Cities, JC Penney at the Southdale Center regional mall in Edina, and Gordmans, according to the Colliers report. Sales of retail space in the Twin Cities picked up during the fourth quarter, with the biggest transaction coming when American Realty Advisors paid $126.3 million for the 434,000-square-foot Central Park Commons in Eagan. Sales volume for all of 2017 was $643 million. That was less than the $1.1 billion in sales in 2016 and $929 million in 2015. Retail sales in 2014 were less, at $50 million. [divider] Related: Gordmans files for bankruptcy, will liquidate Eagans Central Park Commons sells for $126M
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|Publication:||Finance and Commerce|
|Date:||Feb 16, 2018|
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