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| Market Data | Current Trends | Outlook |
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| Inventory (sf) | Central City | Suburban |
| Total | 262,249 | 14,616,888 |
| Vacant | na | 496,317 |
| Vacancy Rates | na% | 3.40% |
| Under Construcion | na | 132,640 |
| Net Absorption | 90,000 | 81,635 |
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| Site Prices ($/sf) | Central City | Suburban |
| Improved Sites |
| Less than 2 acres | $3.50 | $2.00 |
| 2 to 5 acres | na | $1.70 |
| 5 to 10 acres | na | $1.25 |
| More than 10 acres | na | $0.90 |
| Unimproved Sites |
| Less than 10 acres | na | $0.32 |
| 10 to 100 acres | na | $0.16 |
| More than 100 acres | na | $0.08 |
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Prime Source of Financing: Commerical Banks
Mortgage Money Supply:Ample
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| Composition of Absorption |
| Warehouse/Distr. | 61.0% |
| Manufacturing | 14.0% |
| High Tech/R&D | 25.0% |
| Composition of Inventory |
| Warehouse/Distr. | 60.0% |
| Manufacturing | 30.0% |
| High Tech/R&D | 10.0% |
| Rate of Construction |
| Warehouse/Distr. | Down 6-10% |
| Manufacturing | Down 6-10% |
| High Tech/R&D | Same |
| Dollar Volume-Sales |
| Warehouse/Distr. | Same |
| Manufacturing | Same |
| High Tech/R&D | Same |
| Dollar Volume-Leases |
| Warehouse/Distr. | Same |
| Manufacturing | Same |
| High Tech/R&D | Same |
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| Sales Prices |
| Warehouse/Distr. | Down 6-10% |
| Manufacturing | Down 6-10% |
| High Tech/R&D | Same |
| Lease Rates |
| Warehouse/Distr. | Down 6-10% |
| Manufacturing | Down 6-10% |
| High Tech/R&D | Same |
| Site Prices | Same |
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| Absorption |
| Warehouse/Distr. | Down 6-10% |
| Manufacturing | Down 6-10% |
| High Tech/R&D | Same |
Construction
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| Warehouse/Distr. | Down 11-15% |
| Manufacturing | Down 6-10% |
| High Tech/R&D | up 11-15% |
| Dollar Volume-Sales | Down 6-10% |
| Dollar Volume-Leases | Down 6-10% |
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| Sales Prices | Lease Prices | Construction | Vacancy |
| Central City | Suburban | Central City | Suburban | ($/sf) | Indicators |
| Less than 5,000sf | $23.00 | $40.00 | $2.75 | $4.60 | $48.00 | Moderate Oversupply |
| 5,000 - 19,999 sf | $21.00 | $32.00 | $2.28 | $3.70 | $42.00 | Moderate Oversupply |
| 20,000 - 39,999 sf | $12.00 | $26.00 | $1.38 | $3.00 | $38.00 | Balanced Market |
| 40,000 - 59,999 sf | na | $26.00 | na | $3.00 | $32.00 | Balanced Market |
| 60,000 - 99,999 sf | na | $26.00 | na | $3.00 | $30.00 | Balanced Market |
| 100,000 - 250,000 sf | na | $24.00 | na | $2.75 | $24.00 | Balanced Market |
| More than 250,000sf | na | na | na | na | na | Balanced Market |
| High Tech/R&D | na | na | na | na | 135.00 | Moderate Oversupply |
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| Warehouse and Factories | Research & Development |
| Central City | Suburban | Central City | Suburban |
| Real Estate taxes | $0.45 | $0.75 | na | $1.00 |
| Insurance(Fire and Liability) | $0.22 | $0.12 | na | $0.12 |
| Structural and Roof Maintenance | $0.20 | $0.15 | na | $0.15 |
| Common Area Maintenance | na | na | na | $0.35 |
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Reporter(s)
Olson Konrad, Konrad Olson Real Estate 701.280.1606 email me
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Continued slow demand for office warehouse space stopped speculative construction, especially for multi-tenant space in the 3,000-8,000 sq. ft. range whose tenants were primarily small business owners and not credit tenants. Primary growth came from large firms in the market such as Marvin Windows and the firms that provide logistic services and sub-assembly services to these manufacturers. Global Electric Motorcar, a division of Mercedes Benz, absorbed a significant amount of space for manufacturing and warehousing. Downtown revival from tax incentives offered through the Renaissance Zone legislation prompted a $30 million renovation boom. Because of these renovation incentives, there were no vacancies in old loft-type warehouse.
In Cooperation w/
Neal Ericksmoen, Appraisal Services 701.235.1189 neal@asind.com
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Entrepreneurs and small business need confidence that consumers and the national economy are healthy before they embark on expansion and growth to fill the vacant inventory of space. Net absorption is trending downward. What usually was a one-year supply of vacant space may need another six to ten months to fill. (The survey does not cover the submarkets of Moorhead, West Fargo, and nearby cities that have 220,000 sq. ft. of vacant space.)
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| Definitions |
| Please read carefully. The following definitions are given to insure uniformity of response. Use, not building design, determines reporting category. |
Central City/Suburban Areas -Since the definition of urban and suburban areas varies widely, it is the responsibility of the individual survey panelist to reflect his or her area's particular characteristics.
High Technology/R&D - Refers to highly improved space with 50 percent or more office potential and higher-than-normal parking.
Must have some industrial function to qualify; cannot be pure office.
Total Inventory -Total square footage of rentable industrial space (including R&D space), vacant and occupied, including owner occupied space, ready for tenant finish, in your market area.
Vacant Inventory -Total square footage of vacant rentable industrial space, including sublease.
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Net Absorption - Net absorption is the net change in occupied space.
Construction - Ground must be broken. Do not include projects that are still in the planning stage.
Prime Industrial Building - Buildings in the top 25 percent of overall desirability of the existing inventory; such buildings are considered to be for general purpose uses such as industrial, research, warehouse and/or manufacturing.
Net Lease - A lease in which the tenant bears the responsibility for real estate taxes, insurance and operating expenses.
Gross Lease - A lease in which the tenant's rent includes real estate taxes and fire and extended coverage insurance, as well as maintenance of the roof structure and outside walls.
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Improved Sites - Sites in the top 25 percent of overall desirability of the existing inventory. Such sites are in a "ready-to-build" condition and are essentially level and graded and serviced with all necessary utilities.
Unimproved Sites - Sites in the top 25 percent of overall desirability of the existing inventory and are zoned for industrial use. Streets and utilities may not yet be installed but are reasonably close and available.
Construction Costs - Should reflect only hard construction costs such as general contractor, overhead, and profit but exclude architectural and engineering fees, and financing.
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Copyright 2002 - Society of Industrial and Office Realtors (SIOR)
Konrad Olson is a licensed broker in the State of North Dakota and Minnesota.
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