MN BACK TO SCHOOL MARKET UPDATE
The kids are off to school. It’s time to close up the cabin and focus on getting something done before year end. Fall is always a busy time in the Minnesota commercial real estate market, as we are seeing here at CERRON Commercial Properties.
The 2013 Real Estate Market is looking up as - The National Association of Realtors forecast that things are going in the right direction! Expect to see gains in new and existing home sales. Commercial real estate is seeing vacancy drop and rent growth across all property types. They also foresee job growth by 2 million this year and 2.6 million next year. This is all good news for our country including a projected 3% increase in GDP by 2014. These national trends are also reflected in our state of Minnesota.
MNCAR Market Report Released
The holidays are passed and as I await the dreaded visa bill I reflect on how my own shopping patterns have changed. Last year I bought nearly everything at CVS. There were no lines, ample parking, friendly service and everything was wonderful. This year we went online to find our purchases which were mostly electronic for our teenage children from our cabin in Hayward, WI. By law we are responsible for the sales tax we incur for online purchases. The online retailers that do not have a physical store where we legally reside are not responsible to collect sales tax, although the consumer is still responsible to collect and submit on their tax return. As more and more consumers switch to online purchases, the state loses the revenue normally collected in the past. Consumers are not used to submitting sales tax outside the transaction and they shouldn’t be expected to do so. Brick and mortar retailers like Target, Best Buy and others are at a disadvantage to pay the additional income tax, property tax and capital to occupy prime retail space while Amazon’s prices are typically 7% less—the amount of sales tax collected. The argument against is it is tough on the mom and pop retailers to figure out all the different taxes. One tax rate per state would simplify this issue. Electronic submission and withdrawal would make it easy to implement. The proposed affiliate nexus legislation; Internet Sales Tax Fairness bill would provide $3.5 million in lost sales tax revenues to Minnesota. There are also initiatives being talked about at the Federal level as well that are supported by the International Council of Shopping Centers (ICSC).
Not only would this create a level playing field for retail competition, but would also provide lost revenue at the state legislature.
Sometimes we fail to acknowledge the value we have in the Twin Cities. Here is some information from a presentation made by Dakota County commissioners this fall.
Minnesota is land of 10,000 lakes (actually 11,842 over 10 acres), elongated “o’s”, and notoriously cold winters but was recently was praised for yes, a great place to do business. Minnesota has more Fortune 500 companies per capita. These innovative businesses are not only home grown like 3M and Medtronic, but also home to several international companies who have decided to locate here as well. Minnesota invests in education, has a high work ethic, a diverse business base and strong transportation infrastructure such as the Mississippi River, 23 rail lines, 2 international airports, and a highway system linking either coast. Read more by clicking this link
The other reason people like it here are our high quality of life. From the Broadway theater productions in downtown Minneapolis to Voyageurs National Park you can always find something to do and still breathe the air.
Minneapolis St Paul Regional Business Plan
I recently attended a forum on restoring job growth in the Minneapolis St Paul region that was sponsored by The Itasca Project which is an employer led civic alliance focused on building a thriving economy and improved quality of life for the Minneapolis- St. Paul metro region. Some of this work can be found at www.metromsp.org where you can search all available commercial properties that are for sale or for lease. It is a joint public-private
partnership with DEED and MNCAR. MSP has long had a history of stable growth, not boom or bust like some other cities. “Steady success over recent decades renders the region less prepared to deal with data suggesting a pattern of decline. MSP’s growth rates over recent years for productivity, incomes and employment have all trailed national averages.” Venture capital firms and new business start up rankings have also declined. However, for homegrown Fortune 500 businesses, Minnesota ranks at the top.