Market hot spots continue to drive majority of activity
Vacancy and absorption trends
Quarter Two of 2017 saw a slight drop in vacancies from 15.3% to 15.2% throughout the entire Minneapolis-St. Paul office market. The strongest performer by far was Class A, where 350,000 square feet of positive absorption occurred. The majority of this absorption was seen in the Minneapolis CBD. The largest absorptions in the Minneapolis CBD were Amazon, Zipnosis, Ryan Companies and the U.S. Immigration Service.
Metrowide, Class B saw another negative absorption quarter and is now showing a vacancy rate of 17.1%, up from last quarter’s 16.5% in the multi-tenant universe. However, the negative Class B numbers have been expected for a while. Wells Fargo is finishing phased move-outs from numerous Minneapolis CBD leased spaces into their newly-owned building in East Town. This is counting as negative absorption. The same story is happening in the St. Paul CBD. Ecolab vacated space from the Ecolab University Center to relocate into an owned building, which is in the St. Paul CBD. Another negative absorption in the St. Paul CBD is Cray, Inc., who finally vacated space from Cray Plaza. The company signed a new lease over a year ago to move into the newly-constructed Class A building Offices @ MOA which is located in the Airport/South of the River submarket.