Minneapolis-St. Paul Multifamily Market Report

CBD leasing regains momentum. Vacancy in downtown Minneapolis and St. Paul fell by about 100 basis points in the first quarter of the year, driven by a sharp pullback in new supply and strengthening demand. Improved office absorption last year has fueled office-using hiring in early 2025, reinforcing leasing activity among upper-tier rentals. Meanwhile, Class C vacancy in the Minneapolis core remains above 9 percent, reflecting ongoing job losses in lower-wage sectors. Nearby Uptown and Richfield are also seeing uneven demand, where Class B vacancy reached a record high near 6 percent in March amid recent deliveries and pressure from elevated Class A concessions. Nevertheless, with completions set to slow further, the risk of rising vacancy should stay limited, even if job growth softens.