Click here to view all Q3 2015 Minneapolis Office Market Reports
Minneapolis CBD leads in large leasing deals
Vacancy rates in Minneapolis CBD continue their trend of shrinking every quarter. Vacancy at IDS Center declined 250 basis points since 2014 and the building now has its lowest quarterly vacancy in recent years. The demand for premium downtown office space is substantial and even co-working firms are getting in on the craze. Recently, two shared-space companies out of Chicago, Industrious and Assemble, leased a collective 36,000 sf with plans to rent out collaborative workspace to entrepreneurs and small firms by end of year.
Finance and insurance driving expansions and relocations
As of this quarter, metro employment in finance and insurance industries has finally rebounded to pre-recession levels. The office market has seen substantial leasing activity from firms like Ally Financial which recently relocated 150 employees to the Shoreview Corporate Center with plans to add another 250 jobs by 2017. Other firms like One Beacon Insurance Group, Securian Financial Group, Travelers Companies, and General Casualty Company have either invested in new space or absorbed existing space in all corners of the Minneapolis-St. Paul market.
St. Paul CBD becoming a rising market
Ecolab finalized its $47 million purchase of the downtown St. Paul Travelers tower in August, the site of its future headquarters. Meanwhile, the Pioneer Press sold its headquarters to a developer planning on renovating the 300,000 sf building into apartments. With investment like the $63 million St. Paul Saints stadium, the $957 million Green Line light rail transit, and plenty of new restaurants and retail, existing availabilities will be attractive for both office and multi-tenant housing. Fortunately, it is expected that Oppidan’s makeover of the old Macy’s building will provide an additional 200,000 square feet of leasable office space to the St. Paul CBD by 2017.