MSP office leasing congregating in next-newest tier of buildings

Since the pandemic, many tenants have prioritized high-quality spaces in new or recently renovated properties over spaces within older vintage properties with inefficient designs or outdated amenities.
Following the pandemic, new-age office buildings (post-2010) saw steadily increasing leasing volume each year from 2021 to 2023. However, 2024 saw leasing activity tumble across all construction eras, excluding the next-newest tier of 90’s/00’s era offices and older 50’s/60’s era properties.
With limited incoming and current new-age space options, tenants have shifted their attention to the next-newest tier of office buildings, which has resulted in steady growth of 90’s/00’s era leasing volume post-pandemic, a trend that is expected to continue until more new-age space options are brought to market, despite leasing volume in the market declining overall.
With limited new-age office developments expected to deliver in the near future, leasing activity within the next-newest tier should continue trending upwards as the next-newest stock of office buildings remains in high demand.

February 18, 2025

US-MN-MSP Minneapolis