Minneapolis-St. Paul industrial market report

Q3 2021

The Twin Cities has benefited from strong market fundaments observed throughout 2021 with strong leasing activity, low vacancy, increased investment activity and improved economic conditions. Leasing activity is expected to reach an all-time high of over 10 msf by the end of 2021, an increase of 51.8% when compared to the long term averages. Developers continue to push forward with new projects to satisfy demand from industrial users, bringing the total square footage under construction to 5.3 msf.


Economic conditions

The Twin Cities regional economy has rebounded sharply from the effects of the pandemic with unemployment at 3.5 percent as of August 2021.


Recovery rate

Industrial jobs have risen 3.4 percent from July of 2020 to July of 2021, with transportation, warehousing and utilities recording the highest job growth of 7.8 percent over the same timeframe.

1.6 msf

Industrial demand

Absorption year-to-date has remained quite healthy and has already surpassed 2020 levels with a total of 1.6 msf.

5.3 msf

Industrial supply

The Twin Cities industrial construction pipeline has seen a significant increase in construction activity. Currently 25 properties are underway totaling 5.3 msf. 


Pricing trend

Base rents have increased by 10 percent since the beginning of the year and this trend shows no sign of slowing down.


Capital markets

Industrial pricing has increased 49.9 percent since 2018 to $79 psf as of September 2021.

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