Minneapolis-St. Paul office market report
Continued reopening efforts and return-to-office plans were thwarted with uncertainty from the COVID-19 Delta variant, despite increased vaccination rates. Activity in the Twin Cities office sector remained stagnant as bellwether companies continued to consider hybrid and remote work strategies.
Leasing activity was down -17.9% while vacant sublease space continued to drive inventory across the market with 1.15 msf. There has been tenant activity driven by smaller, growth-stage companies as well as large tenants looking to downsize in suburban submarkets.
Office-using jobs in the Twin cities decreased by -5.4%, but two thirds of all job losses have been added back to the local economy since April 2020. Mass transit has yet to see ridership levels and schedule frequency return to normal, a key contributor to reduced traffic in Minneapolis and St. Paul CBDs. Long-term office sector performance is likely to be influenced by major corporations’ decisions coinciding with vaccination protocol, but remains a “wait-and-see” stage.
Minneapolis-St. Paul unemployment rate as of August 2021, down 60 basis points (bps) from the prior quarter.
Vaccination rates across Minneapolis-St. Paul continues to outpace total U.S. numbers as 62.9% have received a COVID-19 vaccine.
Office sector job gains and losses
Change in office sector employment during the pandemic.
Office leasing activity
2020-pro-rated 2021 vs. prior 14-year annual average leasing activity. The surge in the Delta variant has prolonged an increase in leasing activity as employers monitor return-to-office strategies.
Record high Minneapolis-St. Paul vacancy as of Q3 2021. The current vacancy rate surpasses that of the Great Recession when it reached 8.6% in 2009.
Vacant sublease space
Employers continue to reduce office presence and incorporate hybrid work schedules.
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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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