Minneapolis–St. Paul office market report

Q4 2022

The Minneapolis office market experienced a slowdown in the fourth quarter of 2022. Leasing activity declined throughout the second half of the year, and hardly anyone was looking to expand. Tenants seeking 2,000-10,000 square feet have been the most active in the market. That said, the West submarket remains very popular, the Southwest submarket has seen a pickup in activity, and suburban lease sizes have gradually been increasing across the Twin Cities market. Meanwhile, both owners and tenants are choosing to give up space. Several downtown office buildings have been creeping towards foreclosure, including LaSalle Plaza which was transferred to its lender and scheduled for auction. A glut of corporate campus space is also being put up for sublease, including Prime Therapeutics’ 400,000-square-foot headquarters in Eagan that just opened in 2019.

-3.45 msf

Net absorption

Net absorption has totaled -3.45 msf since Q1 2020, -1.78 msf of which is from 2022 alone. The Twin Cities have only seen positive absorption in three of the last 16 quarters.

29.3%

Office visitor volumes

Twin Cities office visitor volumes as of mid-December 2022 were 29.3% of what they were relative to March 2, 2020, the week before the COVID-19 lockdown. While it’s a slight improvement to last December’s 25.8%, it’s still far behind the U.S. average of 46.3%. The pace of recovery between suburban and urban areas was nearly equal, with the suburbs ahead by just 50 basis points.

+2.2%

Office employment rate

As of October 2022, employment levels for office-related jobs were 2.2% higher than they were in February 2020. It’s an impressive turnaround for office employment, but many of the 534,700 people employed have shifted to working remotely.

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Get in-depth office market reporting and insights from commercial real estate experts in the Greater Minneapolis–St. Paul (Twin Cities) area. Avison Young advisors look at Minneapolis–St. Paul commercial real estate activities and the latest Minneapolis–St. Paul statistics to provide you expert market research on Minneapolis–St. Paul's office properties.

Explore different topics like the latest office market pricing trends and analysis of Minneapolis–St. Paul's current office real estate market conditions. Gain a better understanding of Minneapolis–St. Paul’s office real estate outlook and stay ahead of current office space trends. Make smart decisions when it comes to investing in office properties in Minneapolis–St. Paul's competitive office real estate market. Avison Young is your trusted source for commercial real estate office market insights in Minneapolis–St. Paul.

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