Office buildings across the Minneapolis-St. Paul market continue to find new life as apartments, industrial facilities and other uses, according to the latest research from Newmark.
It’s a trend that is steadily shrinking the region’s office inventory while helping reposition obsolete properties for a changing commercial real estate landscape.
According to Newmark’s second-quarter 2026 Office Conversions report, 73 office properties totaling 7.6 million square feet have been removed from the Twin Cities’ office market since 2020 through either demolition or conversion. The report says another 570,000 square feet is proposed for removal through 2028, while an additional 7.2 million square feet of office space has been identified as a likely candidate for potential future conversion or redevelopment opportunities.
Newmark researchers say the shift reflects lasting changes in workplace demand that emerged following the COVID-19 pandemic. As companies reduced their office footprints and increasingly favored smaller, higher-quality buildings to encourage employees back to the workplace, many older office properties were left with persistently high vacancy rates. Those buildings have become prime candidates for demolition or adaptive reuse.
Demolition has accounted for the majority of the inventory reduction. Since 2020, construction crews have demolished 54 office properties totaling about 5.1 million square feet in the Minneapolis-St. Paul market, while 19 buildings totaling roughly 2.7 million square feet have been converted to new uses. Together, those projects have removed nearly 5.8% of the region’s office inventory.
Residential development continues to dominate office conversions. Newmark found that about 2.7 million square feet of former office space has been transformed into multifamily housing, including market-rate apartments, affordable housing and senior living communities. Industrial conversions rank second at 2.1 million square feet, followed by data centers, hotels, artist lofts, retail, government and educational uses. Government incentives, including tax increment financing and historic tax credits, along with streamlined zoning approvals, have helped fuel many of these redevelopment projects, particularly those creating new housing.
The Southeast submarket has experienced the greatest amount of office inventory reduction, with 1.86 million square feet removed since 2020. Meanwhile, office-to-residential conversions remain concentrated in the downtown business districts, where older buildings with smaller floor plates and greater window access are generally better suited for residential redevelopment than newer office towers. Dense urban settings also make demolition more difficult and expensive, encouraging adaptive reuse instead.
Not surprisingly, Class B office buildings have been the primary targets for redevelopment. Newmark reported that about 6 million square feet of Class B inventory has been removed, representing nearly 9% of that segment of the market. Older Class B and Class C buildings often lack the amenities and layouts demanded by today’s office tenants, making them more attractive candidates for conversion than newer Class A properties.
Large corporate campuses have also played an important role in the market’s transformation. Since 2020, approximately 2.2 million square feet of corporate campus office space has been removed or converted, representing more than one-quarter of all office inventory removed during the period. The largest example remains the former Thomson Reuters campus in Eagan, where portions of the property are being redeveloped for warehouse, data center and multifamily uses, illustrating how former suburban office campuses are evolving to meet today’s commercial real estate demands.
