MULTI-TENANT OFFICE LEASING ACTIVITY REMAINS CONSISTENT, RATES FLEX WITH TRENDS
The quarter three Minneapolis-St. Paul multi-tenant office market closed with a positive absorption of 156,000 square feet and a vacancy rate of 14.9%. Vacancy rates have hovered at the same point since the first quarter of 2019. The greatest amount of positive absorption occurred in Minneapolis CBD Class B office product, which gained 157,000 square feet. Another high performing submarket was the West/ Northwest, where Class A office space positively absorbed 51,000 square feet. Both aforementioned submarkets that experienced positive absorption in Q3 are amenity rich, with landlords willing to renovate or provide modern, creative offices. Overall market trends in Q3 show stable leasing has increased rental rates from $15.36 in Q2 to $15.46 in Q3. These increased rental rates have prompted landlords to follow an emerging trend of creating spec-suites within smaller vacancies which has proven to be a popular move-in ready solution for tenants.