Twin Cities Commercial Real Estate Differences
The Twin Cities, Minneapolis and St.Paul are often considered as a whole, one large metro. While this tends to hold true for the most part, there are some key differences between Minneapolis and St.Paul, and one of these differences could be the determining factor that will split them down the road.
What factor would cause a stark difference between the Twin Cities? Commercial real estate growth, especially in urban cores.
Recently we have been talking about the large changes that have been occurring with regards to older and outdated office buildings and their evolution into residential space. This time we are aiming the focus towards the commercial real estate changes, and how these changes could be big factors in the Twin Cities moving forward.
St.Paul has been following a route that continually takes advantage of the already in-place buildings, where as Minneapolis tends to be focused on bringing something new from the ground up each time. While some would argue that Minneapolis didn't have as much outdated space to reinvent, they wouldn't be far off the mark. Minneapolis has many modern buildings and businesses that they are able to continue evolving and work with, however Minneapolis is also expecting some proposals for more residential towers within the next five or six years. The new plans that will take place from the ground up are expected to be game changers for Minneapolis specifically, a stark contrast in terms of developmental process when compared to St.Paul.
There has been a surge in commercial real estate proposals and plans in both St.Paul and Minneapolis, as a response to the increase of residential increases that are planned for the coming years, and many brokers and funding agencies are all in accordance that the bustling increase has no end in sight. The unique situations that the Twin Cities has found themselves in has been attributed to the cities' ability to absorb and keep pace with the increasing and constant demands, allowing for large increases of supply, feeding the progressive cycle. When it comes to residential areas, there are reports of low vacancy rates throughout the areas and that the landlords are able to maintain top rental growth.
But How Do The Twin Cities Do It?
So what are the factors that has allowed the Twin Cities to compensate for the absorption and increase of population and demand? A strong factor that should be obvious is the low unemployment rate.
In the third quarter of 2018, the unemployment rate for the Twin Cities was reported at a 2.7 percent. This percentage is lower than the national average and is indicative of potential, and a higher probability of a bustling economy.
This strong economy has encouraged developers and investors to store more confidence into the Twin Cities as well as plan for a more expansive future. This is represented by the increased residential areas and towers, as well as the redevelopment of older and outdated buildings.
When it comes to the developers in the Twin Cities, they have been key in responding to the demands of the economy, acting on the side of conservation, they don't allow the demand to dictate their production and introduction of products to overflow the market, over-saturating the economy. This is vital, as this allows for the economy to continually feed off of the transaction of supply and demand, instead of fulfilling all the demand at once, halting the need for supply, and freezing the markets.
Outside of the downtown areas in both cities there is an increased bustle and growth as well, as renters-by-choice are choosing to live in the communities surrounding the Twin Cities because of the easy access into the downtown areas from the suburbs. Public transportation, grocery stores, jobs, theaters, and restaurants all have easy access, meaning the amenities of a downtown life are easily reached when not actually living in the downtown areas.
Twins at a Glance, Individual at a Taste
The Twin Cities show huge potential for the coming years thanks to a stable market and the secured confidence of developers as well as the continued increase in population demand. While the Twin Cities', St.Paul and Minneapolis are often referred to as a singular existence, their paths of evolution and development are starkly different. In the years to come we will see large changes in the manner both of the cities conduct themselves, however both will remain under the influence of the same market stability and population demands, meaning growth.
If you are a developer, or someone interested in becoming involved with real estate development, you will need some property to get started. We at Kontor Realty have the knowledge and insight when it comes to choosing a strong property for residential or commercial real estate. Our insight will keep you ahead of a bustling curve, allowing for the strongest of results when mixed with your ambitions.
Give us a call today and let us build a portfolio for your future in the Twin Cities!
Kontor Realty Group
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