A bit of a rebound? Yes. But plenty of remaining challenges, too. That’s the state of the Minneapolis-St. Paul office market entering the fourth quarter of the year.
Avison Young recently released its third-quarter Minneapolis-St. Paul office report. And the news from the report was decidedly mixed.
Demand for office space in the Minneapolis-St. Paul office market rebounded in the third quarter after a weak second quarter, with leasing activity up more than 58% when compared to the second quarter of 2024.
The problem? Leasing volume remains down 28% through the first three quarters of this year when compared to the same period in 2023.
Some other interesting numbers from the Avison Young report:
When comparing the first three quarters of 2024 to the first three of 2023, office leases of under 10,000 square feet grew from 37.9% to 48.6% of sector transaction activity.
Newer office properties remain in higher demand. Avison Young reported that Minneapolis-St. Paul office buildings built after 2010 experienced a 16.5% decrease in availability, falling from 37.9% in the first quarter of 2020 to 21.4% in the third quarter of 2024.
The number of office job postings is on the rise, which could mean better news for the Twin Cities office sector. Avison Young said that job postings in office-using industries increased in August of this year to 6.7% higher than January, 2023, levels.
Office leases of more than 100,000 square feet decreased from 22.8% to 11% of transaction activity during the first three quarters of this year when compared to the same period in 2023.
The availability in the Twin Cities market of office properties built before 2010 has increased from 14.5% in the first quarter of 2020 to 22.11% in the third quarter of 2024.