JLL Minneapolis Industrial Insight | Q3 2016

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Q3 2016 JLL Industrial Insight:
BTS Deliveries Dominate Quarterly Absorption

Inventory jumps 1.2 million square feet; vacancy drops 60 basis pointscurrent-conditions-submarket-q32016
The third quarter has been the highlight of 2016, largely due to some long-awaited build-to-suit (BTS) deliveries. Of the seven facilities and 1.7 million square feet that came on to the market this quarter, the total prelease rate was 91.2 percent, including six buildings that were fully leased. Amazon’s Fulfillment Center in Shakopee, which stands at 820,000 square feet with a mezzanine level, is now among the top ten largest industrial buildings in the metro and the largest existing Class A bulk warehouse. By the end of 2015, total year-to-date (YTD) net absorption was just over 2.8 million square feet. The third quarter of 2016 has already surpassed that with 3.6 million square feet of net absorption YTD.

Northwest submarket begins to normalize after glut of spec developmenttotal-vacancy-by-submarket-q32016
The Northwest submarket experienced its best quarter with over 675,000 square feet of net positive absorption. Just like the rest of the market, large BTS developments like Wagner SprayTech’s 220,000-square-foot warehouse accounted for much of the quarter-over-quarter improvement. Expect more positive absorption over the next six months as a collective 450,000 square feet deliver for Star Exhibits, Interuem, and Blu Dot. And as more e-commerce or 3PL tenants enter the market, Rogers offers the largest selection of bulk facilities with clear heights of at least 32 feet.

Northwest submarket begins to normalize after glut of spec developmentq3-2016-life-sciences-absorption
The Northwest submarket experienced its best quarter with over 675,000 square feet of net positive absorption. Just like the rest of the market, large BTS developments like Wagner SprayTech’s 220,000-square-foot warehouse accounted for much of the quarter-over-quarter improvement. Expect more positive absorption over the next six months as a collective 450,000 square feet deliver for Star Exhibits, Interuem, and Blu Dot. And as more e-commerce or 3PL tenants enter the market, Rogers offers the largest selection of bulk facilities with clear heights of at least 32 feet.

To view JLL’s full Q3 2016 JLL Industrial Insight, click here.

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