Higher quality offices command larger leases in Minneapolis – St. Paul

Over the past five years, Trophy and Class A office buildings in MSP have consistently attracted larger leases than Class B/C properties. Year-to-date in 2024, the average lease size in Trophy and Class A buildings is 5,354 square feet, over 75% larger than the 3,049 square feet average in Class B/C buildings.
Since 2019, average lease sizes have decreased 32% in Trophy/Class A offices and 21% in Class B/C. Despite this aggressive decrease in average lease sizes across all property classes, YTD in 2024 Trophy/Class A leases average 2,565 less square feet, while Class B/C leases have declined by just 797 square feet on average, remaining much more consistent in size over the past 5 years compared to the average lease sizes observed in high-quality properties.
The market continues to see tenants increasingly favor top-tier buildings to attract talent, support hybrid work models, and encourage a return to the office. As the flight to quality continues transitioning to a flight to experience, high-quality spaces within active, lively properties will continue to lead demand.

December 16, 2024

US-MN-MSP Minneapolis