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Market Report

Minneapolis-St. Paul Office Market Report

2Q 2023

Hybrid Work-Induced Consolidation Enhances
Prospects for Some First-Ring Suburbs

Diminished demand downtown persists amid flexible schedules. The metro will register a net relinquishment of more than 1.7 million square feet for a second consecutive year in 2023, the highest amount returned over a two-year period on record. Reduced office usage amid remote and hybrid work schedules contributes to the persistent theme of businesses consolidating their urban real estate footprints. Following Target and Wells Fargo’s exits, Blue Cross Blue Shield and Calabrio, Inc. have also announced relocations, opting for suburban alternatives. This lingering demand decline in downtown Minneapolis comes after the local vacancy rate jumped 380 basis points in 2022 and ticked up further to 21.8 percent in March. 

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