Minneapolis Office Figures Q1 2025

The Minneapolis/St. Paul office market experienced its second consecutive quarter of positive absorption with 105,695 sq. ft. absorbed in Q1, an increase of 192% year-over-year. Suburban markets were the driving force behind this growth, contributing 184,820 sq. ft. of net absorption.

The direct vacancy rate remained stable at 23.9%, down from 24% the previous quarter. Suburban markets were 3.6% below the market average in Q1 with 20.3% vacancy.

Construction activity in Q1 was led by the groundbreaking of the Craftsman on France in Edina. There have been two preleases completed for the development with 60% of space remaining available. Delivery is anticipated in the summer of 2026.

Leasing volume slowed in Q1, with 1.2M sq. ft. transacted in the first quarter. Demand was driven predominantly by Class A product (76% of activity), renewals (53%), and deals below 20,000 sq. ft. (77%).

Office sales volume totaled over $131 million in Q1, marked by a large user-sale of the former Thomson Reuters campus building for anticipated office conversion in Eagan.