Minneapolis–St. Paul office market report

Q3 2024

Demand for office space in the Minneapolis–St. Paul office market rebounded in the third quarter of 2024 after a weak second quarter, with leasing activity up over 58% from the leasing volume recorded in second quarter of 2024. However, leasing volume through the first three quarters of 2024 is nearly 28% lower than the leasing volume experienced through the first three quarters of 2023. High-quality properties remain in high demand, with leases for smaller spaces growing in popularity while large leases over 100k sf are declining, and despite a -4.3% decrease in office-using employment, job postings in office-using industries have grown 6.7% since the beginning of 2023.
10.7%

Leases under 10k sf increasing

When comparing the first 3 periods of 2024 to the first 3 periods of 2023, leases under 10k sf grew from 37.9% to 48.6% of transaction activity year-over-year. Alternatively, availability in MSP buildings of an older vintage (pre-2010) has increased from 14.5% in Q1 2020 to 22.11% in Q3 2024. Modernization and investment in aging assets keep older properties competitive, while tenants entering the market maintain asset-specific leverage in an increasingly segmented marketplace.

-16.5%

Availability in newer buildings decreasing

MSP office buildings constructed after 2010 experienced a (16.5%) decrease in availability from 37.9% in Q1 2020 to 21.4% in Q3 2024. Another significant observation through the first 3 periods of 2024 compared to the first 3 periods of 2023 is the year-over-year change in leases above 100k sf. A decrease of (11.8%) from 22.8% to 11.0% of transaction activity, coupled with the increase in leases under 10k sf signify a positive trend among smaller occupiers and a lessening desire for large spaces.

6.7%

Job postings in office-using industries rising

Job postings in office-using industries have increased to 6.7% above January 2023 levels in August 2024, seeing a significant rise in postings since the end of 2023.

Your source for the latest Minneapolis–St. Paul office market report

Get in-depth office market reporting and insights from commercial real estate experts in the Greater Minneapolis–St. Paul (Twin Cities) area. Avison Young advisors look at Minneapolis–St. Paul commercial real estate activities and the latest Minneapolis–St. Paul statistics to provide you expert market research on Minneapolis–St. Paul's office properties.

Explore different topics like the latest office market pricing trends and analysis of Minneapolis–St. Paul's current office real estate market conditions. Gain a better understanding of Minneapolis–St. Paul’s office real estate outlook and stay ahead of current office space trends. Make smart decisions when it comes to investing in office properties in Minneapolis–St. Paul's competitive office real estate market. Avison Young is your trusted source for commercial real estate office market insights in Minneapolis–St. Paul.

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