How big of an impact can office conversions have in the Minneapolis-St. Paul market? How about a vacancy drop of more than 200 basis points?
That’s what Avison Young is predicting in its recent Data Bite report on the Twin Cities office market.
According to Avison Young’s research, if the possible office-to-residential conversions already identified in downtown St. Paul happen, the Minneapolis-St. Paul office sector’s vacancy rate could drop by 260 basis points.
To get this number, Avison Young cited a recently published office conversion study from architecture firm Gensler. In this study, commissioned by the St. Paul Downtown Alliance, Gensler analyzed 20 office properties that were considered candidates for conversion to multifamily.
Gensler chose nine office properties as good candidates for conversions. Converting these buildings to multifamily would remove nearly 3.5 million square feet of vacant office space from the downtown St. Paul market. That would drop the Minneapolis-St. Paul office inventory from 112.9 million square feet to 109.4 million square feet.
And that move? It would reduce the office market vacancy rate here from 17.7% to 15.1&, a decline of 260 basis points, according to Joseph Stockman, market intelligence advisor for Avison Young.
