Absorption Velocity Accelerates in Q4 Suggesting a Positive Market Outlook for 2018
The Minneapolis-St. Paul office market ended quarter four with 162,000 square feet of absorption, bringing the total multi-tenant market direct vacancy to 14.7%. Among the product types, Class C was the strongest performing asset class in quarter four with 253,000 square feet of absorption, and Class A led in net absorption on the year with 336,000 square feet. Overall annually, there was still a net negative 75,000 square feet of absorption and vacancy rates slightly increased.
The strongest performing submarket in terms of absorption was the Minneapolis CBD which had 124,000 square feet of absorption in quarter four and 315,000 square feet on the year. The largest gain was 240,000 square feet of long-vacant space taken by Select Comfort to serve as their new Headquarters.