A continued slowdown in speculative development and a similar one in the growth of asking rents. Those were two of the big takeaways from Colliers’ second quarter 2025 Minneapolis-St. Paul industrial report.
According to Colliers, speculative industrial construction continues to slow in the Twin Cities market, with spec building accounting for 33% of all new industrial construction in the second quarter of 2025. That is down from 85% during the Twin Cities’ spec industrial boom in 2023.
Asking rents in this sector did rise on a year-over-year basis, but the pace of rent growth here has slowed. Colliers reported that the average asking rent in the Minneapolis-St. Paul industrial market rose 5.4% on a year-over-year basis in the second quarter of this year. That is down from a peak year-over-year jump of 22.7% in the third quarter of 2024.
The average overall lease rate for industrial properties in the Twin Cities market rose to $9.58 a square foot in the second quarter. That’s up from an average of $9.09 in the second quarter of 2024.
The local industrial market saw 594,000 square feet of positive net absorption in the second quarter of 2025, bringing year-to-date absorption to 1.3 million square feet. Vacancy held at a low 4.2%. Developers only added 687,000 square feet of total new industrial supply during the quarter.
