Vacancies Rise, Rents Slip In St. Paul CBD

ST. PAUL, MN-Vacancy rates are creeping up and rents are sliding down in Downtown, according to a new report from the Greater St. Paul Building Owners and Managers Association. The area’s total office vacancy rate is 8.1%, up from 5.5% in 2000, says Jim Miller, a St. Paul commercial real estate consultant.

If the survey is restricted to multi-tenant, competitive space, the vacancy rate is up to 13.9% from 9.1% last year, according to the report. Of the Downtown area’s 16.4 million sf of office space, 42% is composed of government and owner-occupied buildings.

The total Downtown market has absorbed 343,645 sf of additional office space in 2001 compared to a year ago, but the competitive market showed 277,855 sf had been added to vacancy, according to the report.

Five buildings accounted for about two-thirds of 481,000 sf of additional vacant office space this year in the downtown area according to the annual report. Among the buildings is Minnesota Life’s 21-story tower at 400 N. Robert St, which ended up with 120,000 sf of vacant office space as the insurer has shifted some operations to its new 13-storyhigh-rise at 401 N. Robert St. Other buildings with increased vacancies include the North Central Life Tower, the Commerce Center, Park Square Court and the Hamm Building.

Meanwhile, the median gross rental rate for class A buildings rose $0.03 per sf, up to $24.77 per sf from 2000. The median gross rental rate for class B space is $18.60 per sf, down $0.06 per sf from a year ago. Class C dropped even more, going down $0.25 per sf, to $14.70 per sf.

The vacancy rate among class A buildings doubled to 15.6% from 7.7% last year, whileclass B vacancies rose to 12.5% from 8.4%, and class C buildings rose to 16.8% from 13.6%.