The 11-county Minneapolis/Saint Paul region consistently ranks among the best places to do business in the United States. Three things set it apart: a robust, diverse econonomy, a highly educated workforce and outstanding quality of life. Anchored by the cities of Minneapolis, St Paul, and Bloomington this thriving metro area includes some of the fastest-growing counties and one of the strongest economies in Minnesota.
3rd Quarter 2008 Office Vacancy
The steady rise in vacancy rates – up to 14.1% metro average so far in 2008 -- has already placed downward pressure on rents in most markets. Sublease space returns have increased in the Southwest market and more space can be expected to become available as the financial crisis and slumping consumer confidence weakens economic growth and forces employers to further slash payrolls
Although the city ranks in the top 15 of US cities for Professional and Business services and in the top 10 for Financial Services jobs we will see a contraction in the financial services sector similar to other parts of the country and slow to no growth in the other sectors of the economy as the recession continues. Also state government budget deficits will decrease government funding and related jobs.
Our 2009 outlook for the Minneapolis / St Paul office market is moving towards short term softness in corporate growth, increase in vacancies of 5-10% and pricing contraction of 15-20% with net rates for class A in the $14-$16.00 net range. This market will experience some painful restructuring, followed by stability and moderate growth over the long term.