And you thought housing was bad
Minnesota State Roundup
Published May 1, 2009 | May 2009 issue
While most of the attention this recession has been on housing, trends in commercial property in some markets have been just as deflating.
For example, the combined dollar value of office property sales in the downtowns of St. Paul and Minneapolis crashed by two-thirds last year compared with 2007, on par with the trend nationwide, according to the research firm Real Capital Analytics. Some of the drop is due to lower square-foot prices, but a majority was due to a lack of interested buyers. A report by Colliers International noted that larger sales were "noticeably absent."
The value of retail space sold was also down by two-thirds. Sales of industrial property looked comparatively bright, falling "just" 19 percent, compared to 46 percent nationwide; the average price per square foot sold reportedly even rose slightly. Most of the sales, however, occurred in the first half of 2008, according to Colliers.
A separate survey by Colliers' investment business found that more than three-quarters of investors in these markets expected to stay on the sidelines until the second half of 2009.
—Ronald A. Wirtz