Minneapolis-St. Paul Office Market Report

Diverse demand drivers and constrained supply stabilize office market. Minneapolis-St. Paul entered 2025 with office demand focused on premium submarkets like the North Loop, West End and Interstate 494 Corridor, where modern inventory continues to attract tenants despite softer leasing activity. Corporate expansions by Solventum Corp., Polar Semiconductor and Heliene signal growth in office-using employment, especially in tech and energy sectors. Yet hybrid work habits and corporate downsizing kept vacancy above 15 percent last year, exceeding the five-year pre-pandemic average of 10.8 percent. Construction remains scarce, with only 475,000 square feet set to deliver in 2025 — the lowest since 2013 — and nearly all projects are pre-leased or build-to-suit. Limited speculative development and rising adaptive reuse projects, like office-to-residential conversions, should encourage modest vacancy compression. With a robust economic base, Minneapolis-St. Paul offers cautious optimism for investors this year.