There was a lot of optimism in the last quarter of 2016! Finance and Commerce reported that optimism in America's small businesses has risen to it's highest level since 2004 with month over month gains in November & December 2016.
- 2016 vacancy rates for industrial spaces within the twin cities has fallen from 9.9% in the 4th qtr of 2015 to 8.9% at the end of 2016. Anoka County area is now sitting at 7.4% vacancy
- 2016 vacancy rates for office space within the twin cities has actually risen from 14.9% in the 4th quarter of 2015 to 16.6% at the end of 2016. Anoka County area is now sitting at 19.1%
1st Quarter 2017 Market Forcast
Since the election, we have seen much more confidence in the commercial real estate market. Small business owners believe there is a more pro-business attitude which is leading to higher business activity and optimism for 2017. Customers, vendors, and owners alike seem very positive and we are seeing more activity as our clients start additions as well as planning for a purchase.
Business owners also seem to feel there will be a more lenient view on rules and regulations. After seeing stable interest rates through 2014 and 2015, Feds are predicting they will raise rates 3 times in 2017 (all in small jumps). The recent federal rate hike has had a negligible mark on demand.
- Industrial Market Activity: We are seeing pressure on rates and a continuous rise in prices in industrial purchase and sale. However; there has been more talk about building more Industrial spaces, based on these increased rates. Lease rates are also pushing up in the Industrial marketplace.
- The Retail Market rental rates have gone through the roof with a 50% increase in many retail rental rates. Very finicky and tend to be based on... location, location, location.
- The Office Market is seeing some increase in demand, but still lagging in comparison. Most of the activity is in the spaces under 6,000 sf.
Posted: January 2017