The new projects include Mainstreet Village in New Brighton, Stone Arch Apartments in Minneapolis, Cornelia Place in Edina, Stonleigh at the Reserve in Plymouth, Excelsior & Grand in St. Louis Park, Waterstone Place in Minnetonka, 808 Berry in Minneapolis (267 units) and Grand Marketplace in Burnsville (113 units). The luxury apartment market is particularly soft, showing a 9.4% vacancy among those units with rents from $1,100 to $2,000 a month.

"Owners of many [luxury] communities have been forced to slash rents and offer significant concessions to attract tenants," the report says. Among the concessions: free rent, gifts and moving allowances. The national owners are more prone to concessions than the local owners, according to the report.

Despite the softness, the average rent was still able to eke out a gain over last year. For the third quarter, the average monthly rent was $845, up slightly 0.6% or $5 over the year-ago rate.