There are plenty of reasons for the strong performance of the office market in Minneapolis/St. Paul. As Marcus & Millichap Real Estate Investment Services analysts write in their third-quarter Twin Cities office report, 8,800 office jobs had been added to the Minneapolis/St. Paul region during the first two quarters of 2012.
At the same time, many major corporations in the region have posted record profits as the Twin Cities’ economy continues a more rapid recovery.
This has added up to good times for the Twin Cities’ office market. It’s also brought the construction cranes back to the region.
The Marcus & Millichap report states that developers will deliver 260,700 square feet of office space in 2012. Nearly 460,000 square feet of owner-user space will also be completed this year, according to Marcus & Millichap.
The report also predicts that office vacancy rates in the Twin Cities area will fall 80 basis points to 18 percent. That is a return to 2009 levels.
Asking rents are expected to jump 1.4 percent this year to an average of $22.10 a square foot, while effective rents will rise 2.1 percent to $17.05 a square foot.
