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Market Report

Minneapolis-St. Paul Office Market Report

4Q 2023

Office Popularity Recorded Between the Twin Cities;
Notable Exit Inhibits Southwestern Fundamentals

Midway continues to stand out. Spanning the Marcy-Holmes neighborhood over to the capitol, north of Interstate 94, the Midway submarket has emerged as a substantial target for office leasing, following the immediate shock from the pandemic. Tenant demand has improved here across the quality spectrum, but most notably within the higher-end tier. Over the prior eight quarters through June, a net of 191,000 square feet of Class A space has been taken off the market locally, lowering the segment’s vacancy rate by 1,390 basis points during this span. Employers seeking Class A CBD office alternatives benefit from a segment average asking rent here that is 23 percent below Downtown Minneapolis’ mean, while still centrally located. 
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