Minneapolis-St. Paul industrial market report
Q2 2025
The Minneapolis – St. Paul industrial market saw low vacancy rates persist in Q2 2025, as net absorption remains distinctly positive. Leasing activity through H1 2025 was down from the elevated 2020-2024 H1 leasing average but was just above the 2015-2019 pre-COVID H1 average. The construction pipeline grew to 2.8 msf in Q2 2025 but remains below the record-high of 8.8 msf seen in Q2 2023. With limited speculative developments underway, vacancy is expected to remain tight in 2025.
5.1%
Total vacancy
Since peaking at 5.7% total industrial vacancy in Q3 2024, MSP has seen vacancy descend to 5.1% in Q2 2025, considerably below the national average of 9.3%. Industrial buildings larger than 500ksf have the lowest vacancy at 2.7%, down from 4.7% in Q3 2024, while the next largest size range of buildings (250k-499ksf) has a vacancy of 6.6%, the largest in the market. Vacancy in buildings under 100ksf dropped in Q2 2025 following several consecutive periods of growth.
1.89 msf
Net absorption
The MSP industrial market has seen positive H1 net absorption each year since 2017. Net absorption through first half of 2025 trails only the year prior. Net absorption in the MSP industrial market has remained consistently positive through the first half of each year since 2017, thanks in part to the market’s low vacancy and multiple BTS projects delivering fully occupied. In H1 2025, MSP saw positive net absorption of 1.9 msf, trailing only H1 2024, which posted 2.3 msf of positive net absorption.
4.63 msf
Total leasing volume
Total leasing volume through H1 2025 is slightly higher than the 2015-2019 H1 leasing average of 4.58 msf but remains below the elevated 2020-2024 H1 leasing average of 5.91 msf.
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