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Current Office Survey 2006-2007-PDF Version
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Class A |
Class B |
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2006 Review |
| Inventory (sf) |
CBD |
Outside CBD |
CBD |
Outside CBD |
Total |
2006 saw major moves in both the central
business district (CBD) and the suburban market.
NDSU Development Foundation purchased the
former Lincoln Mutual and Pioneer Mutual
insurance buildings. This doubles NDSU's
downtown campus for architecture and
establishes their new School of Business in the
CBD. In the suburban market the former Banner
Health Systems building was sold to a real estate
investment trust. The trust will lease the building
to Fargo's own Eide Bailly, LLC one of the top
100 accounting firms for their new corporate office. |
| Total |
393,739 |
1,482,674 |
800,653 |
2,749,365 |
5,426,431 |
| Vacant |
21,000 |
23,268 |
110,937 |
394,686 |
549,891 |
| Vacant Sublease |
21,000 |
0 |
0 |
0 |
21,000 |
| Under Construction |
0 |
102,769 |
0 |
38,671 |
141,440 |
| Substantial Rehab |
0 |
34,804 |
0 |
0 |
34,804 |
| Net Absorption |
14,159 |
220,418 |
97,460 |
313,111 |
645,148 |
| Vacancy Rate |
10.67% |
1.57% |
13.86% |
14.36% |
10.52% |
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| Gross Rental Rates ($/sf not including janitorial) |
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| Lowest |
$15.00 |
$18.00 |
$11.50 |
$12.00 |
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| Highest |
$18.00 |
$24.00 |
$14.50 |
$16.00 |
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| Weighted Average |
$16.00 |
$20.00 |
$13.00 |
$14.50 |
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| Sales Prices ($/sf) |
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| Lowest |
$80.00 |
$110.00 |
$50.00 |
$70.00 |
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| Highest |
$100.00 |
$150.00 |
$5.00 |
$110.00 |
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Weighted Average
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$90.00 |
$125.00 |
$65.00 |
$95.00 |
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| NS = No Sales |
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2007 Forecast |
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Fargo continues to benefit from a strong
national economy. We look forward to significant expansions by major companies in our market. Office expansion here will again be predominately back office operations. These uses have a high ratio of employees
per square foot. This high utilization will "tax"
existing older buildings that don't have the
HVAC capacity and can't provide a quality
environment for employees. Community
design standards for new construction will
increase the esthetics of new development
while raising occupancy costs in new
construction. NDSU Technology Park will
open it's new 53,000 s.f. incubator this
spring.Survey is based upon available inventory on December 31, 2006 |
| Operating Expenses ($/sf not including janitorial) |
| Lowest |
$4.70 |
$5.20 |
$3.70 |
$4.00 |
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| Highest |
$6.75 |
$7.00 |
$4.60 |
$5.80 |
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Weighted Average
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$5.50 |
$6.50 |
$4.20 |
$4.70 |
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| Tax Expenses $/sf |
| Lowest |
$1.10 |
$1.85 |
$0.75 |
$1.25 |
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| Highest |
$1.80 |
$2.35 |
$1.40 |
$1.75 |
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| Weighted Average |
$1.50 |
$2.10 |
$1.20 |
$1.50 |
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| Utility Rates: |
CBD $1.50 per sf |
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Parking Ratio |
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Outside CBD $1.50 per sf
Separately Metered |
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CBD - 1 per 1000 sf
Outside CBD - 1 per 300 sf |
Standard Work Letter: $40.00 per sf
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Operating Cost
Escalation: Increases Over Base Year |
| Rate of Return:Cap Rate:8.0 to 9.0% |
Mortgage Money Supply: Ample
Prime Source of Financing:
Commercial Banks |
| Cumulative Discount Rate: 5% |
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Landlord Concessions:
Parking, Additional Tenant Improvements |
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Outlook |
| Leasing Activity Profile |
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Absorption |
Up 1-5% |
Major Activity-Fortune 500 firms, Insurance, Business, Services, Engineering/Architecture
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Construction |
Up 1-5% |
| Minor Activity-Legal/Accounting, Sales, Finance/Banking Government, Energy |
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Vacancies
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Down 1-5% |
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Rental Rates
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Up 1-5% |
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Landlord Concession
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Level |
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Sale Prices |
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Class A
CBD |
Level |
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Outside
CBD |
Up 1-5% |
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Class B
CBD |
Level |
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Level
Outside
CBD |
Level |
| Reporter(s) |
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| Konrad Olson, CCIM SIOR |
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| Neal Eriksmoen of Appraisal Services |
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Copyright 2006 - Konrad Olson Commercial Real Estate 701-280-1606 |
