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Regional Summaries

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Minneapolis, MN

Apartment
No matter how many apartments get built in the 169,050-unit Minneapolis-St. Paul apartment market, they get absorbed. In 2016, nearly 2,000 units of new supply was more than met with nearly 3,000 units of net absorption. The vacancy rate fell 60 basis points over the year to 3.0% and was unchanged during the fourth quarter. Average rents continue to rise moderately. In 2016, the average asking rent increased 3.4% to $1,194 per month, and the average effective rent increased 3.5% to $1,156 per month. The fourth quarter increases were 1.0% and 0.9%, respectively. Overall rents increased 0.3% by both measures in January 2017. VIEW APARTMENT LISTINGS >
Industrial
The 149.3-million-square-foot Minneapolis warehouse/distribution space market tightened in 2016, with net absorption in excess of 1.3 million square feet and a vacancy rate that fell 60 basis points over the year to 11.1%. The rate fell 20 basis points during the fourth quarter despite 336,000 square feet of new supply, as net absorption topped 600,000 square feet. The average asking rent increased 1.7% over the year to $5.99 psf, with the average effective rent up 2.1% to $5.26 psf. The fourth quarter gains were 0.5% and 0.6%, respectively. The vacancy rate was 10.9% in January 2017, with rents up 0.2% by both measures that month. The 59-million-square-foot Minneapolis Flex/R&D space market is unusually large and active, with 396,000 square feet of new supply and nearly 900,000 square feet of net absorption in 2016. The vacancy rate fell 90 basis points over the year and 80 during the fourth quarter to 13.2%. The average asking rent increased 1.9% during 2016 to $8.11 psf, with the average effective rent up 2.0% to $7.08 psf. Rents were up 0.4% and 0.3% during the fourth quarter. In January 2017, the vacancy rate was down 10 basis points, and the average effective rent edged up a penny. VIEW INDUSTRIAL LISTINGS >
Office
The 79.4-million-square-foot general purpose, multi-tenant Minneapolis office market had a strong year in 2016 despite the addition of extensive owner-occupied space. Despite companies vacating their former rental locations, net absorption totaled 692,000 square feet for the year, compared with 463,000 square feet of new space added, and the vacancy rate fell 60 basis points to 15.9%. The rate edged up 10 basis points during the fourth quarter. The overall rate was still 15.9% in January 2017. Rents increased moderately in 2016, with the average asking rent up 2.3% to $23.02 psf and the average effective rent up 2.5% to $17.76 psf. Rents fell 0.2% by both measures in the fourth quarter, but a gain of a penny by each measure followed in January 2017. VIEW OFFICE LISTINGS >
Retail
The 34.3-million-square-foot Minneapolis community-neighborhood shopping center market had a strong 2016, as 375,000 square feet of new development was balanced by 314,000 square feet of net absorption. The vacancy rate began and ended the year at 11.1%, despite edging up 10 basis points during the fourth quarter. The average asking rent was $19.09 psf at year-end 2016, up a strong 3.7% over the year, with the average effective rent at $16.55 psf, up 3.8%. The fourth quarter increase was 0.9% by both measures. In January 2017, the vacancy rate was still 11.1%, and rents were flat. VIEW RETAIL LISTINGS >

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Source: Data provided by Reis, inc.

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