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Dennis Panzer

Dennis Panzer, managing principal at the Minneapolis office of Cassidy Turley, isn’t afraid to be labeled an optimist. He told Midwest Real Estate News that he’s seeing new signs of life in the commercial real estate market in Minneapolis/St. Paul.

Midwest Real Estate News: I know this is an awfully general question, but how are things going in the Twin Cities as far as commercial real estate is concerned?
Dennis Panzer: The stats at the end of the first quarter tell us that things are stabilizing generally. We have seen some absorption in some of the product types. I can also tell you that aside from the statistics, it just feels like activity is starting to generate again. It feels like in the second half of the year, that we may get back to a point in which our vacancies will go down.

MWREN: Why do you think things are starting to pick up?
Panzer: I think that users are starting to get comfortable with our new “normal.” Retailers now understand better what the new market will look like from the standpoint of what they need to sell. The office users are seeing some new opportunities in the marketplace. Some users are looking at different product types. They are seeing an opportunity to upgrade the level of product they are in. The have the chance to go from C space to B space or from B space to A space at less cost.

MWREN: There are still challenges, though, right?
Panzer: The thing that is a little frustrating, especially in the office arena is that for every company that is expanding, there are three or four that are contracting. That is a concern.

MWREN: This is something we’re seeing everywhere.
Panzer: I think companies are finding ways to operate in smaller spaces or with fewer workers. It might be office users who are finding ways to use computers so that they can have fewer people do the same amount of work. In industrial you have companies that are looking to be more efficient in how they store goods so that they can keep costs down and use less space. It’s not just that the economy has retracted, but that businesses have figured out how to be more efficient because of technology. That is a global statement. I don’t care if you’re in Florida, Arizona or Minnesota, that’s happening today.

MWREN: What steps is your office taking to survive this still-difficult commercial real estate market?
Panzer: One of our core values is to build relationships with companies. That’s what we have our people focused on doing, building relationships with the companies that we want to do business with. We stay focused on those folks. We try to demonstrate to them how we can provide the kind of service that they need, and how they can use this service to their advantage to achieve the goals of their company. The economy is not going to be like this forever. If you have yourself positioned with good relationships with companies as we come out of this, you’ll have an advantage. We also have a well-rounded business. We have an active corporate services business that produces ongoing fees. It’s the same thing with property management. While brokerage may be down, we still maintain the property management and corporate service relationships we have.

MWREN: Is there anything in particular about Minneapolis/St. Paul that has helped the cities fare better during the recession?
Panzer: Our unemployment rate is in the 7-and-a-half percent range while the national average is pushing 10 percent. The diversity of our economy helps, too. We have a big medical tech business. We have several key national retailers headquartered here. There are a lot of ancillary uses that get generated because of those. We have core manufacturing companies in our city. We have food-processing companies. We have a more well-rounded economy. We are not reliant on the automobile industry. We are not reliant on any one industry.

MWREN: What are some signs of optimism that you’re seeing in your office?
Panzer: Our brokers are much busier today than they were six months ago. We are doing a lot more showings. We are dealing with a lot more proposals. Our pipeline is building. More listings are getting signed for investment sales. I think there is optimism from the brokerage standpoint that we’ve turned the corner. It’s not going to come rushing back like it was in the early 2000s, but there is reason for optimism.

Tags | Cassidy Turley, Minneapolis, Minnesota, St. Paul

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