Minneapolis–St. Paul office market report
Q1 2024
In Q1 2024, the Minneapolis – St. Paul office market experienced declining demand, as evidenced by the posting of the lowest leasing volume recorded since Q2 2020. This contrasts with positive trends observed in H2 2023, which saw strong leasing activity driven by record-setting subleasing volumes. Despite declining demand overall within the market, the North Loop and West submarkets increased their leasing levels and grew their share of total leasing activity in the market, as other submarkets leasing levels plummeted YoY.
Sublease space available
Nearly 250k sf will convert to vacant space throughout 2024, 65% of which has been on the market for over two years. Growth of new sublease space continued to slow in Q1 with only 280k sf of new space hitting the market. This is a dramatic contrast as over 1.7 msf added in 2022 remains on the market. Most notably, Target’s 812k sf sublease accounts for just over half of all sublease space with more than five years of remaining term.
Total market leasing activity conducted in Southwest
Despite an 8% decrease in leased SF from Q1 2023, it represents an even larger portion of market activity than a year prior. The North Loop and West submarkets were the only areas in the market which saw an increase in leasing activity compared to Q1 2023. In contrast, the largest submarkets, Minneapolis CBD and Airport/Southeast, saw a decline in activity compared to the previous year.
Total available space across the market
This remained relatively unchanged from Q4 2023 after falling from total in Q3 2023 (25.4 msf).
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