Optimism About Twin Cities Economy Tempered By How Long The Cycle Has Lasted (And Maybe A Trade War)
The Super Bowl is over, though winter is not, and now is an optimistic time when it comes to the Twin Cities and the state economy.
Significant numbers of business leaders responding to Twin Cities Business’ Quarterly Economic Indicator study in late December said they plan to increase hiring and capital expenditures, and revenue is expected to grow this quarter.
Does the strength of the local and state economy translate to optimism for commercial real estate? Mohagen Hansen Senior Market Segment Leader Todd Novak said it does.
"I'm optimistic about the future market first because I am an optimist, but also because our market has traditionally been a more stable and steady market through fluctuations," Novak said.
He said there will probably be a general slowing of the market in one or two years, possibly because of the natural business cycle — or maybe brought on by tariffs or other political acts.
"The housing market will continue to grow, but shift to more specialized infill projects like we're already seeing with our project at 50th and France in Edina," Novak said.
"There will always be a need for this type of mixed-use walkable infill as cities continue to support it, versus traditional single-use buildings."
Novak is the project manager and architect for the Market Street mixed-use redevelopment underway in Edina. That involves the redevelopment of several properties owned by the Edina Housing and Redevelopment Authority in a popular business district.
"We continue to be busy in the healthcare, building repositionings, government and industrial sectors and see strength continuing for healthcare, building repositioning and government for the foreseeable future," Novak said.
Even some of the niche sectors in real estate will do well in the near and mid-term.
"As baby boomers downsize, and with steady growth in multifamily, we've also seen our storage sector grow," Novak said.
Novak will be a speaker at Bisnow's Minneapolis State of the Market event March 14 at Fifth Street Towers.