Renters are flocking to Minneapolis’ suburbs in their search for apartment units, according to the latest research from Marcus & Millichap. Demand for suburban apartment units remains high despite a slowdown in multifamily construction, the company reported.
Marcus & Millichap recently released its 2025 Minneapolis Multifamily Investment Forecast Report, one that shows a local apartment market that is in the middle of a significant transformation, one that favors the suburbs and not urban apartment buildings.
“Suburban demand is intensifying as the region faces a slowdown in new construction and evolving policies,” said Todd Lindblom, first vice president and regional manager at Marcus & Millichap.
The report outlines several key trends for investors in the area:
Suburban Market Strength: Areas like Burnsville, Apple Valley and South St. Paul-Eagan are experiencing strong rent growth and declining vacancy rates, driven by limited new supply and increased demand.
Construction Slowdown: New multifamily completions in the metropolitan area are expected to drop significantly, from more than 8,000 units completed in 2024 to just more than 3,500 units in 2025, easing competitive pressure on existing properties.
Policy Changes: Adjustments to St. Paul’s rent control laws, along with ongoing discussions in Minneapolis, could shape investor sentiment. As a result, suburban markets may become more attractive to potential buyers.
Employment Growth: With the metropolitan area projected to add 18,000 jobs in the coming year, employment is nearing pre-pandemic levels, further fueling demand for rental housing.
Emerging Investment Opportunities: The $350 million Upper Harbor Terminal redevelopment in North Minneapolis stands out as a promising investment, Apartment units in suburban areas like Maple Grove should also prove to be strong investments.
“The Minneapolis-St. Paul multifamily market is navigating a unique mix of supply constraints, policy shifts, and employment growth, which creates new strategic opportunities for investors,” Lindblom said, in a statement.
