MARKET OVERVIEW

‒ The Minneapolis office market experienced 107,177 sq. ft. of positive absorption in Q3 2021, a marked increase over the first two quarters of the year.

‒ Q3 leasing was 38% higher than the previous quarter, and 61% of activity was new leases or expansions.

‒ Three buildings are under construction, including the much-anticipated RBC Gateway, the first new multitenant office tower in the Minneapolis CBD in 20 years, which will open in early 2022.

‒ Average net asking rates increased to $16.48 per sq. ft. and the vacancy rate increased to 21.2%.

The Minneapolis office market showed signs of improvement in Q3 as the economy continued to reopen. Despite increases in vacancy, leasing was stronger than Q2 and absorption was positive for the first quarter since Q1 2020.