Class C office space--the kind craved by startups and nonprofits--saw a big occupancy-rate jump over the last year in downtown St. Paul. But that's something of an illusion, according to Eric Rapp, one of the commercial real-estate professionals behind a report released this week by the St. Paul Building Owners and Managers Association (BOMA).
The Class C market actually held relatively steady in 2009�10, says Rapp, co-chair of BOMA's marketing and leasing committee, which is in charge of producing the organization's annual
Office Market Report. But the total amount of Class C space shrunk significantly with Ramsey County's purchase last year of the Metro Square Building on E. 7th Place. That moved nearly 400,000 square feet of office space from Class C to BOMA's Government classification, and bumped up downtown St. Paul's Class C occupancy rate from 63.9 percent to 83.3 percent.
In reality, Rapp says he suspects "nothing major" has changed in the amount of space available in Class C buildings in areas such as Lowertown, where many small companies go in search of economical leases close to the heart of the city. One other change is the addition in this year's report of the Southbridge Office Center at 155 S. Wabasha St. With that addition of 22,000 square feet and without the Metro Square Building, about 140,000 square feet of Class C office space remains ready for new occupants.
The overall occupancy rate in downtown St. Paul inched up from 90 percent in 2009 to 91 percent this year. It's an increment of progress that BOMA's Office Market Report can point to with confidence. "Saint Paul BOMA prides itself on developing one of the most accurate, first-hand, and detailed office market reports in the region," writes BOMA chair Fred Koehler.
Source: Eric Rapp, St. Paul Building Owners and Managers Association
Writer: Chris Steller