Frequent readers of our Minnesota Commercial Property Tax Appeals Blog will recall a recent post on the Ramsey County Assessor’s Report 2021.
Assessor Luis Rosario noted that the future of St. Paul’s office market is unclear, even though similar markets around the country are contending with weakened demand for office space due to a shift to remote work in many businesses.
He also points out that “it has been a challenging period for retail properties since the start of the pandemic.” Even before the pandemic, many traditional businesses were struggling to compete with e-commerce, but because the pandemic accelerated the shift to e-commerce, the challenges have intensified, especially in the restaurant industry.
Rosario says “grocery and big box stores are . . . doing very well, as are certain shopping centers anchored by these stores,” and that there’s “a great deal of optimism . . . in this market segment.”
Supply up, demand down
The Ramsey County Assessor also says there was a significant pre-pandemic increase in hotel/motel market supply, but the national health crisis resulted in “sizable decreases in both business and leisure travel activity” and that high-end hotels have especially struggled in the past year-plus. Rosario writes that “a much stronger market is expected as the region emerges from the pandemic.”
Of all the real estate markets, industrial is the strongest in Ramsey County, Rosario says. Much of its strength is due to the e-commerce boom and the growth it has spurred in the warehouse distribution space. “In Ramsey County, these market dynamics have produced low vacancy rates and record-high sale prices for industrial properties.”