Market Notes Vol. 8
2012 Office Market Highlights and
Outlook for 2013
Despite a year of political, economic and fiscal uncertainty, the Twin Cities office market had positive absorption of 637,270 SF dropping the overall vacancy rate to 18%. The majority (57%) of all absorption occurred in the Class A office market which reduced Class A vacancy rates to 13.6%. As the office market continues to tighten, the balance of power in negotiations
has begun to shift back toward landlords, especially for tenants seeking space in excess of 100,000 SF. Tenants of 20,000 SF or less still have numerous options and Class B and C properties continue to offer additional concessions with vacancies above 20%. Several C
properties are now undergoing plans for apartment conversion including the Soo Line Building, Loring Park Office Building and potentially the Plymouth Building. All of these are located within or near the Minneapolis CBD.