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Regional Summaries

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Minneapolis, MN

Apartment
The surge of new supply is finally beginning to loosen up the 166,746-unit Minneapolis-St. Paul apartment market. Despite another year of strong demand, the vacancy rate increased 40 basis points in the fourth quarter and 80 during 2015 to 3.9%. The vacancy rate edged down to 3.8% in January. In 2015, the average asking rent increased 5.1% to $1,152 per month, with the average effective rent up 4.9% to $1,114 per month. The fourth quarter increase was 1.0% by both measures, followed by gains of 0.3% asking and 0.4% effective, respectively, in January. VIEW APARTMENT LISTINGS >
Industrial
The 148.6-million-square-foot Minneapolis warehouse/distribution space market had a huge year in 2015, with 3.4 million square feet of new supply and 3 million square feet of net absorption. The vacancy rate began and ended the year at 11.7%, but it fell 10 basis points in the fourth quarter as just 276,000 square feet was added. The average asking rent increased 1.2% over the year to $5.89 psf, with the average effective rent up 1.4% to $5.15 psf. The fourth quarter increases were 0.5% and 0.6%, respectively. Occupancy was essentially flat, and effective rents increased a penny in January 2016. The 58.7-million-square-foot Minneapolis Flex/R&D space market also had an active year, with 423,000 square feet of new supply in 2015 and 617,000 square feet of net absorption. The vacancy rate of 14.1% was down 50 basis points, both over the year and during the fourth quarter. The average asking rent was up 1.3% over the year to $7.96 psf, with the average effective rent up 1.5% to $6.94 psf. Rents increased 0.9% by both measures for the quarter alone. Net absorption and new supply were each around 100,000 square feet in January as rents edged up 0.1% by both measures. VIEW INDUSTRIAL LISTINGS >
Office
The 79.1-million-square-foot general purpose, multi-tenant Minneapolis office market sputtered in 2015, with just 454,000 square feet of net absorption and 491,000 square feet of new supply. The vacancy rate increased 30 basis points in the fourth quarter to 16.5%. It was also at 16.5% a year earlier. The vacancy rate was still 16.5% in January 2016. The average asking rent ended 2015 at $22.50 psf, and the average effective rent at $17.32 psf, after fourth quarter decreases of 0.9% by both measures reduced the annual gain to minus 0.4%. Overall rents rose a penny by both measures in January. VIEW OFFICE LISTINGS >
Retail
The 33.8-million-square-foot Minneapolis community-neighborhood shopping center market had an 11.4% vacancy rate at year-end 2015, down 50 basis points over the year on 108,800 square feet of new supply and 251,000 square feet of net absorption. The rate fell 30 basis points in the fourth quarter and 10 in January 2016. The average asking rent rose 0.4% last year to $18.41 psf, with the average effective rent up 0.6% to $15.94 psf. Rents increased by 0.1% asking and 0.2% effective in the fourth quarter, and 0.2% by both measures in January 2016. VIEW RETAIL LISTINGS >

Source: Data provided by Reis, inc.

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