ABOUT THE AUTHOR: STEVE
BERGSMAN is a nationally
recognized financial and real
estate writer. For more than
twenty-five years, he has
contributed to a wide range of
magazines, newspapers and wire
services, including the New York
Times, the Wall Street Journal
Sunday, Global Finance, Executive
Decision, and Chief Executive.
The SIOR Foundation is a 501 (c) ( 3) not-for-profit organization.
All contributions are tax-deductible to the extent of the law.
Promoting and supporting initiatives that educate, expand,
and enhance the commercial real estate community.
can down the road,” he explains. “Now, the company is more
bullish on the economy and decided to go ahead and lease a
Elliman is working another life science company lease, this time
for 60,000 square feet that will also be a build-to-suit. He also
negotiated a 175,000-square-foot lease in a build-to-suit for a
company called Corporation Service Co.
“There’s a fairly high vacancy in this market, but Class A space is
getting tight,” Elliman says. “The companies now going to build-to-suits couldn’t find what was wanted.”
Finally, there are some markets that are just outliers and behave
differently than most others.
“In the Minneapolis metro, office and industrial leasing remains
slow,” says Jill Rasmussen, SIOR, CCIM, a principal in The
Davis Group of Minneapolis. “Development, however, is not
dead. There is one Minneapolis property sector that has been hot,
hot, hot – medical office buildings.”
“A few years ago we saw clinics going into retail space. Now we
are seeing larger projects, freestanding medical office buildings
with ambulatory surgery centers and a mix of primary and
specialty care facilities, going up nearer to where patients reside,”
The sweet spot for these buildings is 40,000 to 50,000
In the last four years, The Davis Group has built 12 of these
projects, from 35,000 to 62,000 square feet in North Dakota,
Idaho, but mostly in Minnesota. These are custom type buildings
with heavy duty power, lots of plumbing, gurney-size elevators
and most are build-to-suits with 15 to 20 year leases.
“We just finished two projects this year and we’re starting a
third,” says Rasmussen. “We try to do three a year.”
Not bad business for a market that Rasmussen says has “no office
development and no spec development.”
Some markets just behave differently.