Minneapolis-St. Paul Retail Market Report

A renewed population surge lifts the Twin Cities. By late 2025, Minneapolis-St. Paul’s job base will be just 1 percent shy of its pre-pandemic peak, sustaining an unemployment rate below the historical average. This stability, combined with the metro’s largest two-year influx of new residents since the 1980s — driven by retirees — continues to bolster retail spending. Supply additions remain constrained by costlier financing, as only 300,000 square feet is set to break ground this year — the second-lowest total on record. Fundamentals are staying strong, particularly in suburban corridors like Maple Grove, Apple Valley and Eden Prairie, where vacancy rates remain below 2 percent. Overall vacancy will rise slightly, but stay near record lows, keeping the metro among the five least vacant major U.S. retail markets. While overall rents are recovering modestly, suburban power centers outperform with higher-than-average rents, driven by strong demand and limited supply. This trend is expected to continue near key exurban nodes, benefiting from the region’s strong job and population growth.