Market Intelligence

Minneapolis/St. Paul OfficeQ2 2018 MARKETBEAT

Minneapolis/St. Paul OfficeQ2 2018 MARKETBEAT

Economy The Twin Cities employment market continued to ti second quarter of 2018 as 22,100 jobs were added year. The region is effectively at full employment as unemployment has fallen -30 basis points (bps) fro quarter 2017 to its current rate of 2.9%. The constr pool continues to influence commercial real estate access to transit, amenities and housing are top of employee attraction and retention equation. Market Overview Driven by a strong economy, high employment and growth, the overall vacancy in the second quarter 2 decreased -50 bps from first quarter 2018 in the T office market. In a continuing trend, leasing remain subset of tenants gave back space to reduce their f That downsizing, along with large users that traded Q2 17 Q2 18 12-Month Forecast .0M 2.0M 3.2% 2.9% 4.3% 3.8% Q2 17 Q2 18 12-Month Forecast 17.0% 17.1% 149k 274k 1.2M 2.2M $25.21 $25.32 Econom The Twin Ci second qua year. The re unemploym quarter 201 pool continu access to tr employee a Market Driven by a growth, the decreased - office mark subset of te That downsi space in fav continued t and vacanc The overall Class B spa vacant. Co commodity with layout asking rates $25.00 $26.00

MINNEAPOLIS/ST. PAUL OFFICE

MINNEAPOLIS/ST. PAUL OFFICE

Economic Indicators

Economic Indicators

12-Month Forecast

Minneapolis Employment

Q2 17

Q2 18

Minneapolis Unemployment

U.S. Unemployment

Minneapolis Employment

2.0M

2.0M

ECONOMIC OVERVIEW

Minneapolis Unemployment

3.2%

2.9%

*Numbers bove are quarterly averages; Q2 2018 data based on May values

Market Indicators (Overall, All Classes)

Market Indicators (Overall, All Classes) *Numbers above are quarterly averages; Q2 2018 data based on May values The Twin Cities employment market continued to tighten in the second quarter of 2018 as 22,100 jobs were added year-over-year. The region is effectively at full employment as unemployment has fallen -30 basis points (bps) from second quarter 2017 to its current rate of 2.9%. The constrained labor pool continues to influence commercial real estate decisions as access to transit, amenities and housing are top of mind in the employee attraction and retention equation. U.S. Unemployment 4.3% 3.8%

Vacancy

YTD Net Absorption (sf)

Under Construction (sf)

Average Asking Rent*

12-Month Forecast

Q2 17

Q2 18

*Rental rates reflect gross asking $psf/year

Overall Net Absorption/Overall Asking Rent 4-QTR TRAILING AVERAGE

Vacancy

17.0% 17.1%

YTD Net Absorption (sf)

149k

274k

225 275

Under Construction (sf)

1.2M

2.2M