Minneapolis Real Estate Market Report

Minneapolis Office Market

Following positive absorption of 199,987 SF in the first quarter of 2025 and 26,337 SF in the second quarter, the market maintained modest momentum in the third quarter with an additional 12,311 SF of positive absorption. Vacancy held steady at 20.2%. Flight to quality continues to define the market, creating a widening gap between “haves” (well-capitalized, amenitized assets) and “have-nots” (buildings with limited amenities and owner capital for improvements). In the suburbs, larger space users of 30,000-plus SF have largely completed relocations or renewals, while mid-size tenants of 10,000 to 20,000 SF are now driving most leasing activity.

Minneapolis Industrial Market

After negative absorption of 500,602 SF in 2Q25, absorption was positive 1,754,799 bringing the year-to-date total to over 3.2 MSF. Vacancy decreased to 4.2% from 4.4% at 2Q25 and 4.5% at year-end 2024. Currently, over 3.8 MSF is under construction and over 2.2 MSF has been delivered YTD. Industrial land prices for sites on the leading edge of the next development wave have nearly doubled over the past five years, driven by strong out-of-state demand from big-box warehouse users.