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0 • Demand for Medical Office is strong enough to support new construction throughout Ramsey County, particularly in prime retail areas and even in some secondary retail nodes. • The story for offices in the past year is stable market fundamentals, but insufficient demand for new space to move the numbers. • Office rental rates, although not improving, are not losing ground, and occupancy rates, although still weak, are not getting worse. • Occupancy levels are best with Class A and C properties, while Class B properties continue to show a slower recovery. Retail — • The retail market is showing some improvement, particularly in the County's two major retail areas surrounding Rosedale and Maplewood Malls. • After several years of struggling to fill space vacated by mid-sized, or "junior box' retail tenants during the national economic downturn, many of these spaces have backfilled with a variety of new retail users, including fitness centers, fast casual restaurants, and tenants new to the Twin Cities retail market. • The story is somewhat different for those properties in lesser locations that have experienced continued difficulty in filling space and decreasing rental rates. Industrial— • Certain segments of the industrial market are showing significant market strength. • Well located properties, with ceiling heights greater than 22 feet, are experiencing increased demand by users and investors. • Industrial cap rates are compressing due to increased investor demand and more market liquidity. • Many industrial users throughout the County are also expanding their facilities due to increased business demand. • The market is softer for older industrial properties with ceiling heights under 18 feet. Apartment — • Overall, the apartment market in Ramsey County continues to show considerable strength. • Vacancy rates remain very low, and rental rates are up for all market segments and most areas. • This is particularly true for the larger complexes, in high demand locations, identified as Class A and Class B properties. 2015 Assessment Forecast • Markets continue to perform very well. • Residential listings and pending sales are down, but sale prices continue to increase. • Ramsey county MLS data show median sale price up 14.4% Jan to June • Preliminarily forecast for change in assessment next year. o Residential assessed values likely to rise by 5%; with a range by city of 3% to 12%. o Apartment assessed values likely to increase by 2% to 3%, some more o Commercial values likely to increase 1% to 2% Excellence • Respect • Diversity