Colliers International MSP, along with Dougherty Funding LLC, recently presented the Minneapolis-St. Paul Economic & Investment Strategy Outlook. This exclusive event, hosted at Warehouse Winery in St. Louis Park, took a look at the Twin Cities investment market, with insights from experts in the industrial, office, retail, and multifamily sectors. A strong focus was placed on economic trends and factors affecting the local market. The panel also noted future strategies that will help both local and global investors make the most of the Minnesota market.
Murray Kornberg – Executive Vice President, Dougherty Funding LLC
Mark Kolsrud -Senior Vice President, Colliers International MSP
Bob Pounds -Senior Vice President, Colliers International MSP
Julie Lux -Vice President, Colliers International MSP
Mark Kolsrud gave insight on the industrial market, which is currently seeing low supply but strong demand across the board for both owner-user and investment properties. According to Kolsrud, “Minneapolis is enjoying some great quality dynamic bulk industrial action at the moment.” Bob Pounds joined Kolsrud when discussing the office market, where there has been a significant amount of sale activity. The experts have seen investors turning to Class B properties and suburban offices as the number of Class A properties for sale dwindle. Downtown Minneapolis is going through a unique office transformation, with many large companies including Wells Fargo moving into new spaces, and increased millennial interest in areas including the North Loop, Downtown East, and Northeast driving the market.
The retail market is seeing some interesting action in the Twin Cities, with investors favoring prime properties in core urban first-ring suburbs, but finding there are a limited number of assets available for sale. The grocery market is also very strong, with many big players trying to break into the central region. Pounds added his thoughts on the bricks-vs-clicks trend, stating, “Online purchasing continues to have a profound effect on the retail market,” and retailers need to continue to create unique aspects and experiences to drive shoppers into stores to compete with the likes of Amazon. Investment trends in multifamily consist of increased interest in large value-add investments, and cap rates that have compressed noticeably as investors chase the limited pipeline of available properties. Julie Lux added that many millennial renters are still in favor of urban locations, with many putting the “experience” above all else. “This sometimes means living above their means, while also creating investment opportunities for something new and different – condos? Micro-units?”
Overall, Minnesota’s thriving business environment, diverse economy, educated workforce, and world-class transportation system all add to its favorability to investors, making the Twin Cities a globally competitive place to invest, do business, and live.
See our full Twin Cities Investment Trends Report for even more insights on the local market