Minneapolis St. Paul industrial vacancy is even tighter than it may seem

In this data bite, we took a closer look at the MSP industrial market’s total vacancy rates by build date from pre-1970 to present. Despite MSP’s low overall vacancy, nearly half (47.5%) of the market’s vacant space remains concentrated within a segment of newly built properties – showcasing a tighter market than it seems already. Vacancy in the market started to trend upward in 2022-23, largely due to a surge of new speculative product delivering, some of which is still in the initial lease-up phase. Growing users looking to relocate may find limited Class B/C options and instead, decide to look at brand new space, spurring another wave in the Flight to Quality.
  • Despite an overall vacancy rate of just 5.1% in Q2 2025, nearly half (47.5%) of MSP’s industrial vacancy remains concentrated within a segment of newly built properties.
  • Vacancy in the market started to trend upward in 2022-23, largely due to a surge of new speculative product delivering, some of which is still in the initial lease-up phase.
  • Notably, some availabilities in properties delivered from 2022 to 2024 represent sublet opportunities or spaces that are on the market due to tenants signing shorter term leases and moving out. These spaces do not represent “never-occupied” vacant speculative spaces.
  • Growing users looking to relocate may find limited Class B/C options and instead, decide to look at brand new space, spurring another wave in the Flight to Quality.

July 31, 2025

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