- “Vibrant” might best describe the Twin Cities medical office market, which consists of 73 buildings totaling just less than 4.4 million square feet. The vacancy dropped to 8.2% in the second half of 2005 from 10% at mid-year.
- The market absorbed 54,502 sq. ft. in the second half for a total of 109,322 sq. ft for the year. Medical office weighs in significantly healthier than the overall Twin Cities office market, which reports a 16.1% vacancy rate. (The industrial market reports 13% vacancy.)
- The pipeline is rich with new construction for medical office. On-campus and off-campus projects that are under construction, planned or in preliminary stages total approximately 1.5 million square feet. These projects range from off-campus medical office buildings—being built in high-demand, fast-growing suburban markets—to plans for major hospital expansions. On-campus and off-campus projects expected to be delivered in late 2005 and 2006 total approximately 785,000 sq. ft.
- Net rental rates for medical office in the second half of 2005 remained flat at $16.31 per sq. ft. New construction projects are coming to market in the $19.50 to $21.50 per square foot range, depending on the submarket.
|