Minneapolis Office Market
Quarterly net absorption was negative 979,222 SF, contributing to a year-to-date total of over 1.6 million SF. Much of this negative absorption was concentrated in the Southwest, due to Best Buy’s listing of 600,000 SF at its corporate campus. Since the onset of the pandemic, the highest negative absorption was recorded in the third quarter of 2021, exceeding 1.9 million SF, and positive absorption was only observed in the first quarter of 2022 when RBC Gateway was completed. The vacancy rate including sublease space has risen to 17.3%, from 16.4% in the second quarter of 2023. The highest vacancy rate is 22.8% in the Minneapolis CBD, in contrast to suburban submarkets, where overall vacancy rate is notably lower at 14.4%. Following a 1.4% decrease in the second quarter of 2023, the first decline in asking rents since the onset of the pandemic, rental rates declined 3.2%. It’s important to note that overall rental rates remain elevated, while concessions are substantial and increasing, particularly in the Minneapolis CBD.
Download Minneapolis Office Market Report 3Q23