MARKET SNAPSHOT: Minneapolis Maintains Status as Growth Leader in Employment and Occupancy
By Philip Shea, Associate Editor
The Twin Cities is continuing to witness exceptionally low unemployment and vacancy as compared to the rest of the country. The unemployment rate was in the low 6 percent range at the end of 2011—this while the national rate stood at 8.5 percent—and vacancy is expected to remain in the 3 percent range through 2012.
Furthermore, the overall metro population grew by over 23,000, or 0.7 percent, and the median household income stood at $74,819. The average overall rent was $960 per month, with central Minneapolis being the most expensive area ($1,0744 per month) and Anoka County being least expensive area ($842 per month).
According to Hendricks & Partners, Minneapolis and Saint Paul have repeatedly ranked among the nation’s top cities in terms of economic vitality, innovation, quality of life, education and entrepreneurship. As such, a variety of companies are already expected to expand their local operations in 2012, including Target, Proto Labs, American Family Insurance, BMS Group and Accenture.
The respective municipal governments are seeking to push such reputation even further with the creation of the Minneapolis Saint Paul Regional Economic Development Partnership, or Greater MSP. The partnership hopes to create 25,000 jobs over the next five years, this on top of the 75,000 jobs expected to be created organically.
In an interview with the Minneapolis Post, Michael Langley, CEO of the newly created partnership, proclaimed he is confident of his group’s initiative to market the Twin Cities to businesses looking for places to expand. “For the first time, the Minneapolis-St. Paul region will have a one-stop shop for businesses hoping to retain their workers, grow and expand their operations, or for those looking to move to a new community,” Langley said.
Apart from initiatives being put forward by Greater MSA, Hendricks & Partners reports the possibility of a $200 million redevelopment of the Block E Entertainment Complex into a luxury casino. If completed, the new complex would include gaming space, restaurants and retail shops and would likely attract 5.6 million visitors to the Twin Cities every year, resulting in 600 temporary construction jobs and up to 2,800 permanent jobs.
Permits for construction of new apartment projects has increased significantly since the onset of the recession in 2009, going from under 1,000 units per year to around 2,500 units per year. Hendricks & Partners expects vacancy rates to trend up slightly to 4 percent in 2013 as a result of so many new additions to the market and a renewed shift toward homebuying. However, this is still far lower than many regions in the country, ensuring that Minneapolis will remain a prime market in multifamily for the foreseeable future.
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