Survey: Optimism rising in Minn. commercial real estate

A new survey from the University of St. Thomas shows increased optimism in the Twin Cities commercial real estate industry.

The twice-a-year survey polls industry leaders, including developers, investors, and finance professionals. The firms represented make up roughly 60 percent of the Twin Cities commercial real estate market.

The May responses show growing confidence for the next two years on measures like rents and occupancy levels. However, University of St. Thomas real estate professor Herb Tousley said poll respondents were pessimistic about land prices and the cost of building materials, which they expect will climb.

"That makes development projects, building projects more expensive and basically erodes the return for the investors or developers," he said.

Tousley said overall optimism would have been higher absent those inflationary concerns.

The composite survey result was 55.6 in May, up from 53.5 in May 2010. A score above 50 is favorable.