Q4-2021 Minneapolis-St. Paul Office Market Report
MARKET RECAP:
All Properties:
Total Inventory: 129,388,269 sf
Total # of Buildings: 1,028
Absorption: 692,907 sf
Vacancy: 15%
Asking Rate: $25.34 (full service gross)
New Construction: 1,280,278 sf
Multi-tenant Properties:
Total Inventory: 92,405,464 sf
Total # of Buildings: 836
Absorption: 96,192 sf
Vacancy: 19.3%
Asking Rate: $25.34 (Full Service Gross)
ECONOMIC OVERVIEW:
According to the Bureau of Labor Statistics (BLS), the unemployment rate for the Mpls-St Paul metropolitan statistical area (MSA) decreased 220 basis points to 2.2% for November 2021 from 4.4% for November 2020. The unemployment rate for the US was 4.2% in November 2021 down from 6.7% last year. State of Minnesota unemployment rate was 3.3%. The Mpls-St Paul MSA saw an increase in job growth as well as an increase in office job growth in professional, financial and information with 12,700 during the same period.
MARKET HIGHLIGHTS
During Q4 2021 the market experienced over 1.1 msf of leasing activity in 333 transactions. Year over Year Class A properties vacancy rate increased for direct space from 10.2% Q4 2020 to 11.1% Q4 2021. Multi-tenant class A properties also increased from 14.5% Q4 2020 to 15.3% Q4 2021. For multi-tenant properties the Mpls CBD vacancy was 23.1%, St Paul CBD was 16.9% and suburban markets was 17.2% as a lot of companies consolidated their space. Most of the negative absorption change was due to Deluxe vacating 310,000 sf in Northeast market. They moved to Mpls CBD last quarter.
EMPLOYMENT:
MARKET OVERVIEW:
The Mpls-St Paul office market, consisting of 129.3 msf of space in seven counties across the metro topping (692,907) sf negative absorption for Q4 2021 and the vacancy rate for the market stands at 15.0% for all properties. Absorption for direct space excluding subleases was (562,520) sf negative absorption. Multi-tenant properties posted 19.3% vacancy with (96,192) sf negative absorption during Q4. Direct space multi-tenant was only group to post positive absorption with 34,000 sf. During Q4 2021 there were 16 construction projects throughout the market totaling just over 1.28 msf.
Q4-2021 Minneapolis-St. Paul Office Market Report created by Minnesota Commercial Real Estate Association. For more information you can reach them at: www.mncar.org
