Q2 2023 Minneapolis Office Market Report

Minneapolis/St. Paul, collectively referred to as the Twin Cities, is the 16th largest MSA with approximately 3.69 million residents and home to 17 fortune 500 public companies’ headquarters. The Twin Cities is also ranked highly for quality of life, labor force participation, health care, and workforce quality. The Minneapolis/St. Paul Industrial Market consists of over 380 million square feet. As of second quarter of 2023, Minnesota’s unemployment rate had improved to 2.9 percent, outperforming the US unemployment rate of 3.6 percent.

Space utilization changes have negatively impacted the Minneapolis office market. Minneapolis has long enjoyed a strong headquarters economy, which pre pandemic provided stability. However, this has also been a driver of negative absorption in recent quarters. Target’s decision to allow its more than 8,000 downtown office workers to work remotely full-time, the most prominent example of the shifting dynamic in the office market.

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