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.