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| Market Data | Class A | Class B |
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| Inventory(sf) | CBD | Outside CBD | CBD | Outside CBD |
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| Total | 393,739 | 1,158,177 | 725,876 | 2,132,309 |
| Vacant | 30,163 | 78,794 | 124,400 | 230,262 |
| Vacant Sublease | 0 | 0 | 0 | 35,000 |
| Under Construction | 0 | 26,783 | 0 | 0 |
| Substantial Rehab | 0 | 0 | 0 | 0 |
| Net Absorption | -21,729 | 118,956 | -11,962 | 108,797 |
| Vacancy Rate | 7.66% | 6.80% | 17.14% | 10.80% |
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| Rental Rates ($/sf) |
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| Lowest | $12.00 | $13.50 | $8.50 | $12.00 |
| Highest | $15.00 | $18.00 | $11.50 | $14.50 |
| Weighted Average | $13.00 | $14.50 | $10.00 | $12.50 |
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| Sales Prices ($/sf) |
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| Lowest | n/a | $90.00 | $30.00 | $60.00 |
| Highest | n/a | $180.00 | $58.00 | $96.00 |
| Weighted Average | n/a | $95.00 | $48.00 | $88.00 |
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| Operating Expenses ($/sf) |
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| Lowest | $4.00 | $3.80 | $3.02 | $3.10 |
| Highest | $4.50 | $4.00 | $3.50 | $3.60 |
| Weighted Average | $4.25 | $4.00 | $4.25 | $4.30 |
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| Tax Expenses ($/sf) |
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| Lowest | $1.10 | $1.75 | $0.74 | $1.24 |
| Highest | $1.75 | $4.21 | $1.43 | $1.98 |
| Weighted Average | $1.70 | $2.00 | $1.18 | $1.82 |
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Utility Rates:
- CBD $1.50 per sf
- Outside CBD $1.25 per sf
- Separately Metered
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Parking Ratio:
- CBD - per 1 sf
- Outside CBD - 1 per 300 sf
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Standard Work Letter:$30.00 per sf
Typically based on dollars per square foot | Operating Cost Escalation:determined by Base Year
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| Rate of Return:
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Mortgage Money Supply: Ample
Prime Source of Financing: Commercial Banks |
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Cumulative Discount Rate:5%
Landlord Concessions:
Parking
Rental Abatement, Addl. Interior Improvements |
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Leasing Activity Profile
Major Activity- Technology
Minor Activity- Fortune 500 Firms, Legal/Accounting, Insurance, Finance/Banking, Engineering/Architecture, Busines Services, Sales
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| Outlook |
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| Absorption | | Down 6-10% |
| Construction | | Down 11-15% |
| Vacancies | | Up 1-5% |
| Rental Rates | | Down 6-10% |
| Landlord Concessions | | Up 6-10% |
| Sales | Class A CBD | Down 1-5% |
| Prices | Outside CBD | Down 1-5% |
| Class B CBD | Down 1-5% |
| Outside CBD | Down 1-5% |
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| Reporter(s) |
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Olson Konrad, Konrad Olson Real Estate 701.280.1606
Ericksmoen Neal, Appraisal Services 701.235.1189 neal@asind.com |
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| 2002 Review |
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Demand was moderate. Substantial construction, as a result of an abundance of low interest financing, may have resulted in a temporary oversupply. Speculative development was slow. Most of the new development continued to be in the south and southwest areas of the city due in part by the lower real estate taxes in theses areas. Prospects for growth were promising as the technology sector (including the nano technology sector) flourished. |
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| 2003 Forecast |
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Landlords might expect concessions on rental prices due to anemic demand from small to medium users. The bright spot will be demand from technology companies such as Microsoft and from nano technology development associated with North Dakota state University’s Research and Technology Park.
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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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