Overall market vacancy rose to 22.1% in Q3 2025, heavily concentrated in downtown Minneapolis (30.8%) and St. Paul (39.5%), with Class B properties facing the highest pressures
at 25.9% market-wide and 37.5% in the downtown cores.
Market-wide asking rents averaged $31.24 PSF FSG, with Class A rates at $37.06 PSF, driven by rising operational, tax, and CAM costs, leading to annual increases of 6.2% overall, 3.5% for Class A, and 8.1% for Class B.
115,000 sq. ft. of new multi-tenant office construction broke ground in Edina in Q3 2025, bringing the total construction pipeline to 241,000 sq. ft. The new Arcadia project at Hwy 100 and 50th St broke ground on the site of a now demolished
office building and will serve in part as the new headquarters for Opus.
MARKET TRENDS
YOY
22.1%
Forecast
YOY
-397K
SF
Forecast
Under
Construction
YOY
241K
SF
Forecast
Overall Class A Asking
Lease Rates (FSG)
YOY
$37.06
/ SF
Forecast
Read on for an overview of the office market.
SF
Net Absorption
Overall Vacancy
Office Market Report
Q3 2025 Interactive
Minneapolis - St. Paul
Download the full report
Colliers (NASDAQ, TSX: CIGI) is a global diversified professional services and investment management company. Operating through three industry-leading platforms – Real Estate Services, Engineering, and Investment Management – we have a proven business model, an enterprising culture, and a unique partnership philosophy that drives growth and value creation. For 30 years, Colliers has consistently delivered approximately 20% compound annual returns for shareholders, fueled by visionary leadership, significant inside ownership and substantial recurring earnings. With nearly $5.0 billion in annual revenues, a team of 23,000 professionals, and more than $100 billion in assets under management, Colliers remains committed to accelerating the success of our clients, investors, and people worldwide.
This document/email has been prepared by Colliers for advertising and general information only. Colliers makes no guarantees, representations, or warranties of any kind, expressed or implied, regarding the information, including but not limited to, warranties of content, accuracy, and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers excludes unequivocally all inferred or implied terms, conditions, and warranties arising out of this document and excludes all liability for loss and damages arising therefrom. This publication is the copyrighted property of Colliers and/or its licensor(s). © 2025. All rights reserved. This communication is not intended to cause or induce breach of an existing listing agreement. Colliers International MN LLC.
Colliers’ statistical tracked set for Minneapolis-St. Paul includes single and multi-tenant office properties above 10,000 square feet. Banks, medical, religious and government buildings, as well as owner-occupied properties where owners occupy 75 percent or more of the building, are excluded from the total tracked inventory. Market statistics are subject to historical revisions
Jeremy Jacobs
Executive Managing Director
+1 952 897 7778
Jesse Tollison
Research Analyst
+1 952 225 4201
For information and inquiries, please contact us:
Back to the top
Download the full report
Colliers (NASDAQ, TSX: CIGI) is a global diversified professional services and investment management company. Operating through three industry-leading platforms – Real Estate Services, Engineering, and Investment Management – we have a proven business model, an enterprising culture, and a unique partnership philosophy that drives growth and value creation. For 30 years, Colliers has consistently delivered approximately 20% compound annual returns for shareholders, fueled by visionary leadership, significant inside ownership and substantial recurring earnings. With nearly $5.0 billion in annual revenues, a team of 23,000 professionals, and more than $100 billion in assets under management, Colliers remains committed to accelerating the success of our clients, investors, and people worldwide.
This document/email has been prepared by Colliers for advertising and general information only. Colliers makes no guarantees, representations, or warranties of any kind, expressed or implied, regarding the information, including but not limited to, warranties of content, accuracy, and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers excludes unequivocally all inferred or implied terms, conditions, and warranties arising out of this document and excludes all liability for loss and damages arising therefrom. This publication is the copyrighted property of Colliers and/or its licensor(s). © 2025. All rights reserved. This communication is not intended to cause or induce breach of an existing listing agreement. Colliers International MN LLC.
Colliers’ statistical tracked set for Minneapolis-St. Paul includes single and multi-tenant office properties above 10,000 square feet. Banks, medical, religious and government buildings, as well as owner-occupied properties where owners occupy 75 percent or more of the building, are excluded from the total tracked inventory. Market statistics are subject to historical revisions.
Jeremy Jacobs
Executive Managing Director
+1 952 897 7778
Jesse Tollison
Research Analyst
+1 952 225 4201
For information and inquiries, please contact us:
Back to the top
Download the full report
Overall Vacancy
YOY
22.1%
Forecast
Net Absorption
YOY
-397K
SF
Forecast
Under
Construction
YOY
241K
SF
Forecast
YOY
Overall Class A Asking
Lease Rates (FSG)
$37.06
/ SF
Forecast
Download the full report
Read on for an overview of the office market.
Interactive Office
Q3 2025
Minneapolis - St. Paul
Lease Rates
The market posted an overall asking rate of $31.24 PSF FSG, and Class A rates were $37.06 PSF FSG on average. Despite high supply, FSG rates were driven upward by increasing operational costs. Tax & CAM costs increased across the board, and class B owners, who generally have less room in their operating budget to absorb costs were most affected. Class A gross asking rates grew 3.5% year-over-year, and class B grew 8.1% year over year. Overall, asking rates grew 6.2% in the past year. Owners are offering little to no concessions on small leases, preferring to hold onto their capital and potentially spend on large tenants in the market. Tenants are making more significant decisions about their office footprints. Tenants sought optionality in their leases such as making TI allowance transferable to rent payments, but the concessions large tenants asked for pushed term lengths to the 7 – 10-year range.
Subleasing
Sublease availability continued declining in Q3 2025, driven by listings expiring to direct availability and significant companies making return-to-office decisions. Subleases were down 12.4% year-over-year and 28.9% since the peak of sublease availability 2 years ago in Q3 2023. With Target’s call to return to office downtown, Minneapolis might see a significant shift in the sublease market’s biggest needle-mover City Center where Target is currently marketing an 849,000 sq. ft. sublease, which comprises 27.5% of the total market sublease availability. The largest sublease transaction of the quarter was NeuHealth’s 10,000 sq. ft. deal at 10 West End. In Q2, Crecera Brands leased 24,000 sq. ft. at the Offices at Mall of America. These transactions indicate subleases are most successful in the suburbs.
Capital Markets
Few office sales occurred in Q3 2025 in Minneapolis. With relatively high interest rates and office distress across the market, the capital markets have been slow to transact on office properties. Sales volume totaled just $16.9 million in Q3 2025, bringing year-to-date volume to $186 million, which is down 41.5% from Q3 last year. Sales in Q3 trended between $2.5 and $5.5 million, and the buildings were characterized as Class B and C properties between 20,000 and 40,000 sq. ft. Large class A office properties that have traded in the past year have had some sort of distress driving the trade. Well performing buildings that have come to market have struggled to find buyers. Buyers have been opportunistic and looking for discounts, or developers looking to repurpose the office building for different uses. If the Federal Reserve lowers interest rates as anticipated in the coming year, the market may see spurred activity driven by lower interest rates.
Tenants vacated a net total of 396,600 sq. ft. in Q3 2025, bringing YTD net absorption to negative 282,115 sq. ft. The first half of 2025 saw overall positive absorption followed by a wave of vacancies in Q3. The I-494 Corridor experienced the most negative absorption at 205,500 sq. ft., bringing YTD absorption in the submarket to positive 194,724 sq. ft. The Minneapolis and St. Paul CBDs continued to struggle in Q3, with 186,700 sq. ft. negative absorption in downtown Minneapolis, and 125,600 sq. ft. negative absorption in downtown St. Paul. The western suburban submarkets (I-494 Corridor, I-394 Corridor, and the Northwest) have seen the strongest tenant demand at 269,097 sq. ft. of positive absorption year-to-date.
In Q3 2025, the market posted an overall vacancy rate of 22.1%. This vacancy is concentrated in downtown Minneapolis (30.8%) and downtown St. Paul (39.5%). Class B properties, particularly, struggled with elevated vacancy. Market-wide, class B vacancy was 25.9%, and class B vacancy across downtown Minneapolis and downtown St. Paul averaged 37.5%. The market has demonstrated a significant trend of flight-to-quality in the past year, accompanied by companies rightsizing their space requirements. Class A vacancy was 24.6% in Q3 2025, which was down 2.5% since one year ago. Meanwhile, class B vacancy rose 1.7% in that same period to 25.9%. Vacancy rates are being helped despite negative absorption by the demolition of older vacant office buildings. Colliers removed over 200,000 sq. ft. of office properties from the report’s statistical set this quarter due to scheduled demolition and redevelopment.
Vacancy and Absorption
Market Graph
Market Report
Key Takeaway
Historic Comparison
Market Graph
Tenants vacated a net total of 396,600 sq. ft. in Q3 2025, bringing YTD net absorption to negative 282,115 sq. ft. The first half of 2025 saw overall positive absorption followed by a wave of vacancies in Q3. The I-494 Corridor experienced the most negative absorption at 205,500 sq. ft., bringing YTD absorption in the submarket to positive 194,724 sq. ft. The Minneapolis and St. Paul CBDs continued to struggle in Q3, with 186,700 sq. ft. negative absorption in downtown Minneapolis, and 125,600 sq. ft. negative absorption in downtown St. Paul. The western suburban submarkets (I-494 Corridor, I-394 Corridor, and the Northwest) have seen the strongest tenant demand at 269,097 sq. ft. of positive absorption year-to-date.
In Q3 2025, the market posted an overall vacancy rate of 22.1%. This vacancy is concentrated in downtown Minneapolis (30.8%) and downtown St. Paul (39.5%). Class B properties, particularly, struggled with elevated vacancy. Market-wide, class B vacancy was 25.9%, and class B vacancy across downtown Minneapolis and downtown St. Paul averaged 37.5%. The market has demonstrated a significant trend of flight-to-quality in the past year, accompanied by companies rightsizing their space requirements. Class A vacancy was 24.6% in Q3 2025, which was down 2.5% since one year ago. Meanwhile, class B vacancy rose 1.7% in that same period to 25.9%. Vacancy rates are being helped despite negative absorption by the demolition of older vacant office buildings. Colliers removed over 200,000 sq. ft. of office properties from the report’s statistical set this quarter due to scheduled demolition and redevelopment.
Vacancy and Absorption
The market posted an overall asking rate of $31.24 PSF FSG, and Class A rates were $37.06 PSF FSG on average. Despite high supply, FSG rates were driven upward by increasing operational costs. Tax & CAM costs increased across the board, and class B owners, who generally have less room in their operating budget to absorb costs were most affected. Class A gross asking rates grew 3.5% year-over-year, and class B grew 8.1% year over year. Overall, asking rates grew 6.2% in the past year. Owners are offering little to no concessions on small leases, preferring to hold onto their capital and potentially spend on large tenants in the market. Tenants are making more significant decisions about their office footprints. Tenants sought optionality in their leases such as making TI allowance transferable to rent payments, but the concessions large tenants asked for pushed term lengths to the 7 – 10-year range.
Rental Rates
Sublease availability continued declining in Q3 2025, driven by listings expiring to direct availability and significant companies making return-to-office decisions. Subleases were down 12.4% year-over-year and 28.9% since the peak of sublease availability 2 years ago in Q3 2023. With Target’s call to return to office downtown, Minneapolis might see a significant shift in the sublease market’s biggest needle-mover City Center where Target is currently marketing an 849,000 sq. ft. sublease, which comprises 27.5% of the total market sublease availability. The largest sublease transaction of the quarter was NeuHealth’s 10,000 sq. ft. deal at 10 West End. In Q2, Crecera Brands leased 24,000 sq. ft. at the Offices at Mall of America. These transactions indicate subleases are most successful in the suburbs.
Subleasing / Development
Few office sales occurred in Q3 2025 in Minneapolis. With relatively high interest rates and office distress across the market, the capital markets have been slow to transact on office properties. Sales volume totaled just $16.9 million in Q3 2025, bringing year-to-date volume to $186 million, which is down 41.5% from Q3 last year. Sales in Q3 trended between $2.5 and $5.5 million, and the buildings were characterized as Class B and C properties between 20,000 and 40,000 sq. ft. Large class A office properties that have traded in the past year have had some sort of distress driving the trade. Well performing buildings that have come to market have struggled to find buyers. Buyers have been opportunistic and looking for discounts, or developers looking to repurpose the office building for different uses. If the Federal Reserve lowers interest rates as anticipated in the coming year, the market may see spurred activity driven by lower interest rates.
Vacancy and Absorption
jesse.tollison@colliers.com
jeremy.jacobs@colliers.com
jesse.tollison@colliers.com
jeremy.jacobs@colliers.com
Key Takeaways
Submarkets
Vacancy
Absorption
Vacancy and Absorption
Vacancy