Minneapolis-St. Paul Retail Market Report

Vacancy compression common across Minneapolis submarkets. The Twin Cities’ retail market remains well positioned, despite a recent uptick in local vacancy. Property performance continues to stand out in the south and western reaches of the metro. Here, six of eight submarkets recorded year-over-year vacancy compression during the yearlong period ended in June. Ridgedale, Calhoun, Eden Prairie and Maple Grove highlighted this group, as each entered July with vacancy in the low-1 percent to low-3 percent range. Tight conditions in these submarkets and limited active construction have the potential to steer expanding retailers to other areas of the metro. Should this materialize, leasing activity in Downtown Minneapolis and northern submarkets could improve, preventing a notable increase in metrowide vacancy from occurring over the near term.