Downtown Office Market Gains Momentum

MINNEAPOLIS—The office market in this city has continued to soar even after putting together several very strong years, according to JLL’s Spring 2015 Minneapolis Skyline Review, its study of the top downtown office properties. However, the firm’s researchers also note that a strong discrepancy has developed between the top trophy properties and the other class A and B buildings.

“While total vacancy in the 15 non-trophy assets is slightly north of 16%, total vacancy remains slightly less than 10% for the eight trophy assets,” the firm found. Rental rates have also separated in the last few years. Since 2012, average gross asking rates in the downtown’s non-trophy assets grew by 3.8%, but the top trophies saw 9.4% growth and now command an average gross rent premium of more than $6.00 per square foot.