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Market Report

Minneapolis-St. Paul Retail Market Report

4Q 2023

Improved Economic Drivers and Record-Low
New Supply Aid the Twin Cities’ Fundamentals

Population growth trends back retail demand. By August, Minneapolis-St. Paul’s employment base had climbed within 1 percent of its year-end 2019 measure, helping hold the metro’s unemployment rate below 3 percent. This growing labor market is partially contributing to more net in-migration, as this year the metro welcomes its largest influx of new residents since 2017. A notable portion of this migration could be linked to millennials returning to the metro during family formation years. Amid this age cohort recording its fastest acceleration in more than a decade, household formation exceeds 15,000 for the third consecutive year in 2023, a boon for retail space demand. By year-end, metro vacancy will match its March 2020 measure, the lowest figure among major Midwestern markets. 
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