Continued market stability
Strong absorption, historic low vacancy and steady construction
The industrial market in the Minneapolis-St. Paul metro continues to be a highlight post-recession as vacancy continues to drop below historical levels. The current metro average vacancy rate is
6.8%, compared to a previous rate of 6.9% in Quarter One. Office warehouse maintains the lowest vacancy rate of our three main product types, with the others being bulk warehouse and office showroom/flex.
In Quarter Two, over 450,000 square feet of multi-tenant space was absorbed, bringing the annual total above 600,000 square feet. The pace of annual absorption is behind the last three years but still expected to have a strong end-of-year figure. Bulk warehouse absorbed 300,000 square feet of new space this quarter, compared to 275,000 square feet for office showroom/flex, losing just over 115,000 square feet. The West/Northwest metro had the most absorption in Q2, but four of our five submarkets posted positive absorption numbers this quarter.