©2025 Real Estate Publishing Corporation
February 2025 • VOL. 42 No. 1
A growing demand for 1990s-2000s office buildings? It’s happening in the Twin Cities By Dan Rafter, Editor
I
t’s no secret that a growing number of tenants are choosing higher-quality Class-A office space when making leasing decisions today. But a new report from Avison Young shows just how strong this trend has become in the Minneapolis-St. Paul market. As Avison Young notes in its report, a growing number of tenants have sought higher-quality office spaces since the start of the COVID pandemic. The theory is that by offering their employees quality office spaces with high-end amenities, companies
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will be able to convince these workers to return to the office at least on a part-time basis.
What’s behind last year’s shift? Avison Young pointed to a limited supply of newer buildings.
Avison Young said that what it terms new-age office buildings -- office properties built after 2010 -- saw steadily increasing leasing volume each year from 2021 through 2023 in the Minneapolis-St. Paul market.
Tenants don’t have as many choices today if they are seeking office space in the Twin Cities area built in 2010 or later. Vacancy rates in these properties are lower than they are in older office buildings. Because of this, many are choosing space in the next-newest range of office buildings, those built in the 1990s and early 2000s.
Last year, though, saw a change. Avison Young reported that office leasing activity fell across all office property types except for those properties built in the next-newest era of the 1990s and 2000s.
Office to page 20
Onward Investors’ purchase of Minneapolis’ Ameriprise Financial Center just more evidence of office sector’s struggles By Dan Rafter, Editor
O
nward Investors’ recent purchase of the Ameriprise Financial Center in downtown Minneapolis highlights the challenges that the office sector faces across the country.
Why? The 31-story office tower at 707 2nd Ave. South sold in 2016 for $200 million. Onward Investors purchased the same property for just $6.25 million earlier this year, according to the Minneapolis-St. Paul Business Journal.
And, yes, that does represent a price drop of 97%. This isn’t overly surprising, though. The office market in Minneapolis and across the country has been struggling since the COVID pandemic hit. Today, comOnward to page 22