Established MSP industrial properties maintain strong tenant retention

In this data bite, we took a closer look at the industrial property occupancy rates by analyzing our tracked AY inventory by build date and size buckets. This analysis shows an interesting trend of well-established industrial properties consistently maintaining very strong tenant-retention, as industrial properties constructed before 2020 have sustained an average occupancy rate of 96%. Alternatively, newer industrial construction built post-2020 has seen average occupancy rates fall to just under 78% overall. Interestingly, newly built small-bay industrial product has shown a strong occupancy rate of 99%, highlighting the advantage of greater maneuverability that smaller industrial users hold over large industrial users occupying large blocks of space within older, more established properties, who face more challenges in terms of relocating existing operations. Average occupancy rates of newly built properties larger than 100ksf recording below 82% underscores the challenges of absorbing speculative supply in a shifting market.
  • Minneapolis – St. Paul industrial market occupancy rates indicate strong tenant-retention for well-established properties. Buildings constructed before 2020 maintain an average occupancy of 96%, benefiting from their long-standing market presence and stable demand.
     
  • Alternatively, properties built in 2020 and beyond show significantly uneven performance. Despite a strong average occupancy rate of just over 99% within small-bay industrial properties, newer buildings constructed from 2020 onward have dropped to 78% overall.
     
  • Occupancy within newly built properties larger than 100ksf fell significantly, recording below 82% occupancy rates within each size tranche, underscoring the challenges of absorbing speculative supply in a shifting market.

March 18, 2025

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