There are several unique markets for commercial real estate. In May 2018, Greater Mankato Growth conducted an analysis of office space occupancy for the City of Mankato.
Greater Mankato Growth contacted Blue Earth County’s Assessor’s Office and utilized the County’s Property Information System (Beacon) to calculate the total square footage of buildings on parcels pertinent to this analysis and supplemented this information with other resources. This provided the “denominator” for the vacancy rate calculations.
To compile the vacant square footage, Greater Mankato Growth utilized multiple methods including:
- Online research of national commercial real estate sites
- Online research of local commercial real estate sites
- Windshield survey of commercial property on April 25th and April 26th
- Cross referencing with Blue Earth County Assessor
- Outreach to area businesses
- Review by City Staff
As part of this analysis, office space and commercial space that could easily be converted or has been office space in the past were inventoried. There were 84 locations identified to have vacancy.
It is important to note that considerations were made for:
- Buildings that are about to be filled;
- Buildings listed for sale that are not vacant (an owner looking to sell to another owner);
- Buildings that will be demolished, rather than occupied by a future tenant;
- Buildings that are not currently vacant but may become vacant in the future;
- Buildings that are leased but looking for a sub-leaser.
Greater Mankato Growth calculated 3 different vacancy rates for the City of Mankato:
- Office space – City wide
- Office/commercial space – City wide, office space AND commercial locations that could easily be converted or have been office space in the past.
- Downtown or City Center – Includes all non-residential uses within the valley from Madison Avenue to Sibley Park.
|Type||Total SF||Vacant SF||Vacancy Rate|
*Excludes: industrial, bars, restaurants, fast food, laundromats, funeral homes, bowling alleys, convenience stores, grocery stores, and “big box” retail.
Greater Mankato Growth calculated the vacancy rate within the City Center based upon the 2011 Vacancy Rate Analysis conducted by the City Center Partnership. This vacancy rate includes all non-residential uses. The 2011 vacancy rate for the City Center was 10.03% for 934,373 square feet. To update this figure, Greater Mankato Growth added the square footage from the office towers and mixed-use building constructed on the 500 block of Front Street/Riverfront Drive. Greater Mankato Growth then reviewed the vacancy list for properties within the City Center You’ll see that the vacancy rate has declined since 2011 for the City Center.
|Location||Total SF||Vacant SF||Vacancy Rate|
**Includes all non-residential uses in the downtown valley from Madison Ave to Sibley Park
To provide context, of the vacancy rate, below are items of note compiled from the most recent figures calculated by CBRE on the 3rd Quarter of 2017 (October 9, 2017).
- National vacancy rate for office space is 12.9%.
- The national office vacancy rate for suburban markets is 14.1%.
- The national vacancy rate for downtown markets is 10.6%
- The vacant property listings ranged in size from 22,755 square feet down to 120 square feet. The median square footage of a vacant property listing was 2,000 square feet.
- There is over 1.6 million square feet of existing office space in the City of Mankato. The office vacancy rate is 8.47%% and below the national rate.
- There is 2.9 million square feet of office/commercial space in the City of Mankato. The office/commercial vacancy rate 9.2%.
- The City Center vacancy rate is 9.49% and below the national downtown vacancy rate. The City Center vacancy rate has declined since 2011.
Factors Driving New Office Space
From 2015 to 2017 there was an increase of 1,623 jobs in Greater Mankato (MN DEED, QCEW). Of those jobs 49.5% (803) were “office related occupations.” This number could have been a lot higher if there wasn’t a national talent shortage. Currently the unemployment rate for Greater Mankato is 3% (MN DEED, LAUS). This is one of the lowest metropolitan rates in the country. In order for businesses to grow they need to recruit and retain talent. Many employers of office workers need new office space that will help them grow their business.