Commercial property sales volume fell last year
Star Tribune reports: Tight credit markets led to far fewer big deals for Twin Cities area office, retail, industrial and multifamily properties.
Last year's sharp drop in commercial property sales rippled across virtually every segment of the Twin Cities-area market, and in some cases more severely than other parts of the country.
The dollar value of office property sales in both downtown Minneapolis and St. Paul fell nearly 90 percent, compared with a 73 percent drop for central business districts nationwide. The figures were compiled by two widely quoted real estate research firms, Real Capital Analytics of New York and LoopNet of San Francisco.
The average price per square foot for office space sold in downtown Minneapolis and St. Paul decreased 23 percent while dropping just 4 percent nationwide. The decline for the two downtowns was one of the largest for 10 Midwestern metro markets surveyed by Real Capital and LoopNet and contrasts with gains in some Midwestern cities such as Chicago, Detroit, Indianapolis and Kansas City.
Area real estate professionals say the main reasons for the substantial drop in sales volume were a lack of large office building deals and a sharp fall in buying by foreign and institutional investors. They only accounted for 5 percent of the value of office properties sold in 2008, according to figures from Real Capital and LoopNet, a commercial real estate firm. Foreign buyers accounted for more than 20 percent of the office deals done in the Twin Cities area in 2007.
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Posted by: Nina Turner