The flight-to-quality remains a major trend in the Minneapolis-St. Paul office market, according to the latest research from JLL.
In its 2025 fourth-quarter Minneapolis-St. Paul office report, JLL says that tenants continue to move to modern office spaces with a significant offering of amenities.
Older office spaces? As they are across the rest of the country, they are struggling to land tenants. As their vacancy rates rise, they are swiftly becoming candidates for either conversion to other uses or demolition.
Despite its struggles, the Minneapolis-St. Paul office market did see some leasing activity in the fourth quarter. JLL reported that the quarter’s office leasing activity of nearly 800,000 square feet was led by LeGrand’s move to 10900 Red Circle Drive. LeGrand’s will occupy 98,371 square feet in its new location.
Another big move? Wold Architects is taking 64,902 square feet at Fifth South Sixth in the Minneapolis CBD.
Gamer Packaging also moved to the Minneapolis CBD in the fourth quarter, leasing 20,802 square feet at Fifth Street Towers.
JLL says that the LeGrand, Wold Architects and Gamer Packaging leases were examples of the flight-to-quality movement that continues in the office sector. All three companies are also occupying more space in their new locations, bucking the downsizing trend that is also common in the office sector.
The Minneapolis-St. Paul office sector also saw notable lease renewals in the fourth quarter, including Northmarq renewing its 46,144-square-foot space at Northland Center I and Littler Mendelson renewing its lease of 23,728 square feet at IDS Center.
In a bit of negative news, JLL reported that office sublease space remains high in the Twin Cities market at 4.3 million square feet as of the fourth quarter of last year. An additional 500,000 square feet of office sublease space was listed since the middle of last year.
The local office market also saw negative absorption of 600,000 square feet in the fourth quarter.
The $85 million sale of Wells Fargo Center in the Minneapolis CBD in the fourth quarter ranks as the biggest office sale in the Twin Cities market in 2024.
Additional office sales included the Thomson Reuters headquarters in Eagan, Minnesota, and the American Family Insurance offices in Eden Prairie.
The fourth quarter represented a fairly sluggish end to a struggling year for the office sector in the Twin Cities. JLL reported that the local office market saw more than 1.4 million square feet of negative absorption in 2024. The sector ended the year with a vacancy rate of 24.66%.
