HEARTLAND SNAPSHOT, SEPTEMBER 2004

Minneapolis Retail Market

The Minneapolis/St. Paul retail market continues to thrive with more than 2 million square feet of retail space added in 2003 and early 2004, says Amy Barth, director of operations of Cambridge Commercial Realty. This growth is a result of the continued interest from international, national and local retailers and the overall retail vacancy rate of 5 percent, which is below the national rate of 6.8 percent.

The Minneapolis/St. Paul market boasts almost 50 million square feet of leasable square footage with relatively low vacancy rates.

The foremost activity in retail growth during the past year is occupancy in the suburban markets, such as Blaine, Coon Rapids, Lakeville, Maple Grove, Savage, Shakopee and Woodbury, Barth says. Suburbs in the third, and even fourth, rings are experiencing growth in the retail and restaurant markets. Strong residential growth in these and other areas has stimulated development of community and neighborhood shopping centers. In the cities of Savage, Blaine and Champlin, Super Target anchored the three largest and most recent retail developments in the Minneapolis/St. Paul market. Southdale Center, located in Edina, is planning an expansion in 2004 and 2005, which will feature a Women’s Health Center, restaurants and retail.

Retailers that are new to the Twin Cities include Lowe’s Home Improvement Warehouse, IKEA, Sportsman’s Warehouse, Ultra Electronics (Audio King) and Roundy’s. New restaurants that have entered the market include Balimby Bay, Zyng Noodlery, Qdoba Mexican Grill, Potbelly Sandwich Works and Louis XIII located in the Southdale Mall; Mission Bar & Restaurant located in the IDS Center in downtown Minneapolis; Figaro’s Take & Bake Pizza; and Camille’s Sidewalk Cafe. A few of the most active developers in the Minneapolis/St. Paul retail market are Ryan Companies, Opus and RED Development. Ryan Companies is very active with several Target and Super Target developments, and Opus Northwest and RED Development continue to team up in lifestyle developments, such as Woodbury Lakes currently under development in Woodbury. The Woodbury Lakes concept will be similar to Opus’ the Shoppes at Arbor Lakes, a 411,000-square-foot lifestyle center located in Maple Grove. North American Properties, Told Development Company, Robert Muir Company, CSM Corporation and Paster Enterprises also have had high-quality projects.

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