Q4 2023: Minneapolis Office Market Report

The Minneapolis - St. Paul office market has begun to stabilize as companies settle into their hybrid work models. Companies continue to right-size their space as the buzz throughout the market has led to continued negative absorption, specifically in class A properties. Target, UnitedHealth Group, and Best Buy have offloaded large blocks of space from their corporate campuses, driving up the metro’s available space. Large blocks of space will continue to struggle while spec suites have seen more success as companies want little initial investment and increased speed to market space.

Minneapolis’ average annual lease size remains near an all-time low entering 2024, extending the three-year trend of structurally smaller occupier space requirements. Suburban office space continues to outpace the rest of the market, especially along the 394-corridor due to ease of access and convenience for many workers.