MARKET INSIGHT POST
Q3-2023 Minneapolis-St. Paul Industrial Market Update
Forte Principal, Phil Simonet, provides insight to the Twin Cities industrial market report recently released by MNCAR/REDI.
The overall Twin Cities industrial market remains exceptionally healthy with low vacancy rates, recording breaking net rates, and good net absorption when factoring in the new product brought online during 2023. Q3 2023 had net absorption of 1.68M square feet with YTD net absorption of 3.15M square feet. Q3 2022 experienced net absorption of 2.2M square feet and YTD net absorption of 4.8M square feet. The 2023 vacancy rate for all industrial product types totals 4.3% up 1.0% from Q3, 2022. By Individual product type, Flex, Distribution and Office Warehouse, vacancy rates at the end of Q3 2023 are 7.0%, 4.5% and 3.3% respectively. If single tenant product is removed from the industrial universe, vacancy rates increase to Flex-8.7%, Distribution-7.6% and Office Warehouse-4.9% with an overall vacancy rate of 6.7%. The higher vacancy rate is a result of slightly less net absorption and newer product coming online during 2023 than 2022 (4.178M in 2022 versus 5.7M in 2023).
Other notable market characteristics:
- Two significant areas to watch are the East Metro (Woodbury, Lake Elmo) area where over 1.2M square feet of spec construction has come online and with little absorption of any of the new space. Cottage Grove as an untested multi-tenant market with over 1M square feet of new development and, to date, very little absorption mirrors the East Metro.
2. Interest rate increases over the past year+ and the corresponding negative effect on CAP rates have had an impact on speculative construction (less spec) and will likely help to maintain a healthy equilibrium of new construction versus absorption.
Q3-2023 Minneapolis-St. Paul Industrial Market Update
MARKET RECAP:
Total Inventory: 285,735,118 sf
Total # of Buildings: 3,243
Absorption: 1,682,078 sf
Vacancy: 4.3%
Asking Rate Low: $7.63 NNN
Asking Rate High: $10.64 NNN
Under Construction: 7,601,163 sf
Multi-Tenant Properties
Total Inventory: 150,933,430 sf
Total # of Buildings: 1,822
Absorption: 955,422 sf
Vacancy: 6.7%
Asking Rate Low: $7.62
Asking Rate High: $10.68
ECONOMIC OVERVIEW:
MPLS-ST. PAUL AREA EMPLOYMENT STATS:
MARKET OVERVIEW:
MARKET HIGHLIGHTS:
MARKET STATISTICS BY PROPERTY TYPE
Multi and Single Tenant:
VACANCY RATES BY MARKET
Multi and Single Tenant:
LEASE RATES BY MARKET
Multi and Single Tenant NNN:
MARKET STATISTICS BY PROPERTY TYPE
Multi Tenant:
NEW DEVELOPMENTS BY MARKET:
YEAR-TO-DATE DELIVERIES BY MARKET:
Market Insight
Industrial Market Experts
News & Updates
Q4 2023 Minneapolis-St Paul Industrial Market Summary
MARKET INSIGHT POSTQ4-2023 Minneapolis-St. Paul Industrial Market UpdateForte Principal, Phil Simonet, provides insight to the Twin Cities industrial market report recently released by MNCAR/REDI. The Minneapolis/St. Paul industrial market remains active and healthy...
Q4 2023 Minneapolis-St Paul Office Market Summary
MARKET INSIGHT POSTQ4-2023 Minneapolis-St. Paul Office Market UpdateForte Principal, Jim Jetland lends insight to the Twin Cities office market report recently released by MNCAR/REDI. At the risk of sounding like a “broken record” the office market in the Twin Cities...
Q3 2023 Minneapolis St Paul Office Market Summary
MARKET INSIGHT POSTQ3-2023 Minneapolis-St. Paul Office Market UpdateForte Principal, Jim Jetland, SIOR, lends insight to the Minneapolis-St. Paul office market report recently released by MNCAR/REDI. As more office leases are expiring and most tenants contemplate...