Vacancy tightens to cyclical low as rent reaches new high. The Minneapolis-St. Paul market began 2019 with one of the tightest vacancy rates among Midwest metros, a trend that will be maintained throughout the year as the pace of deliveries slows. Warehouses less than 250,000 square feet will account for the majority of the projects in 2019. The largest portion of new inventory will be located along the Interstate 94 corridor in the northern suburbs and near Interstates 35E and 35W in the south metro. The escalation of e-commerce is generating demand for large suburban distribution space as well as smaller warehouse space close to the urban core for last-mile delivery. As available space gets harder to find, developers are poised to increase production with a number of warehouse and distribution projects waiting for a tenant to get underway. The tight vacancy rate will drive the average rent above $7.00 per square foot for the first time this year.