Minneapolis-St. Paul industrial market report
Q4 2024
The Minneapolis – St. Paul industrial market has seen a slight decline in vacancy rates in Q4 2024, as leasing activity picked up somewhat to close out the year and absorption remained distinctly positive. The MSP market’s vacancy rate remains significantly below the national average and is considered low amongst other Midwest markets. With much of the construction pipeline comprised of BTS developments, vacancy should continue to stabilize as these projects deliver fully occupied and the limited speculative construction is absorbed due to the high demand for new, high-quality industrial space.
$1.35 B
Sales volume
Sales volume in 2024 was the highest since 2022. 2024 volume was over $402M more year-over-year than the $948M transacting in 2023. 2024 saw one of the strongest annual sales volumes since 2015, trailing only 2021 and 2022, which experienced heightened demand post-COVID. 2024 saw sales volume over 68% more than the 2015-2019 pre-COVID average sales volume of $803.3M but remained just 91% of the 2020-2023 average of over $1.48B.
5.3%
Vacancy rate
MSP’s industrial vacancy rate has increased each period since Q4 2022, peaking at 5.7% in Q3 2024. In Q4 2024, MSP experienced a (0.4%) decline from the peak in Q3. Despite total vacancy rates consistently increasing since the end of 2022, MSP’s vacancy rate of 5.3% remains the second lowest amongst Midwest markets, trailing only Detroit’s vacancy rate of 4.4%. MSP’s industrial vacancy rate also resides (2%) lower than the US total vacancy rate (7.3%).
1.4 msf
Net absorption
Net absorption in MSP in Q4 2024 remained positive, spurred on by strong industrial leasing activity and the completion of BTS developments.
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