It's a good time to own a warehouse in the Twin Cities

The pandemic has not been good to much of the commercial real estate industry, but if you own a warehouse anywhere near the city you are probably in good spirits.

State of play: Chris Garcia, a broker at Lee & Associates' St. Louis Park office, has been in the industry for 20 years and he's never seen such a demand for warehouse space.

• "E-commerce is driving everything. Amazon's taking space all over the market," he said.

Driving the news: Online retailers need more and more space to store stuff to meet our shopping habits.

• The vacancy rate for Twin Cities industrial space hovered around 8% for several years, but in the past year has tightened to just 4.2%, according to recent Cushman & Wakefield numbers.
• It's a landlord's market now, and average asking rents have shot up roughly 40% since the pandemic, according to Cushman data.

What's happening: Developers are rushing to build more warehouses as Amazon and other e-commerce companies look for space. A Toronto-based real estate investment trust, WPT Industrial, is breaking ground soon on a 500,000-square-foot warehouse in Shakopee without any tenants.

• The Minneapolis/St. Paul Business Journal says it will be the largest speculative warehouse project in state history.

Bottom line: Garcia said if someone is looking for a big piece of warehouse space they might have to look on the outskirts of the metro because it's so tight in the 494/694 belt.