©2026 Real Estate Publishing Corporation
May 2026 • VOL. 43 No. 2
Finalists and Winners!
A lucrative sector: Twin Cities at center of life sciences boom By Dan Rafter, Editor
Photo courtesy of Farm Kid Studios, Inc.
M
edical technology companies continue to flock to both the St. Paul and Minneapolis region and to the Rochester, Minnesota, market, home to the famed Mayo Clinic. This boom in life sciences demand is creating an opportunity for developers in and around the Twin Cities area. And in good news? The demand for life sciences development throughout the United States is showing no sign of lessening. Pharmaceutical, medical research and biotech firms are looking for new locations. Many want to build their own headquarters space.
We spoke with Chris Lyles, director of life science and technology with Minneapolis’ Knutson Construction, about the boom in life sciences construction and what it means for the commercial construction industry. Here is what he had to say. Why is there so much demand for life sciences space in the Twin Cities and Rochester areas today? Chris Lyles: We are seeing strong demand mostly from the medical technology sector as opposed to pharmaceutical companies, which are concentrated more in other geographic areas of the country. But
we do have our own medical alley here, from St. Paul to Rochester. It’s a hub for medical device companies looking to start up and relocate. The Mayo Clinic, of course, is a draw for many of these companies. In my opinion, Minneapolis-St. Paul offers the best of all worlds for these companies. We have a highly educated workforce. We have strong contractors that are well-versed in this industry. And when companies get away from the coasts, from the traditional pharmaceutical hubs like Boston, San Diego and other areas, the cost-per-square-foot to build and lease is significantly Sciencesto page 34
To succeed in today’s Twin Cities office sector? Landlords must work hard By Dan Rafter, Editor
T
he latest research on the Minneapolis-St. Paul office sector tells a familiar story: Vacancy rates remain high, demand for new office space has dipped and landlords need to work hard to attract tenants. Those are the big takeaways from Newmark’s first quarter 2026 Minneapolis-St. Paul office report. And while many of the numbers in Newmark’s report paint the picture of an office sector that continues to
struggle, there are some signs of hope. The Nemark report points to early signs of a stabilizing market and even cites opportunities for investors who are willing to take a longer-term view of the Twin Cities office sector. Vacancies down … slightly Overall office vacancy across the Twin Cities dipped to 19.9% in the first quarter, according to Newmark’s report, down from 20.8% at the end of 2025. That’s
not a big drop, but any dip in today’s office sector is worth celebrating. In an additional bit of good news, Newmark reported that office net absorption in the Minneapolis-St. Paul market turned positive, too, reaching nearly 50,000 square feet during the first quarter. That improvement, though, comes with an asterisk. Much of the vacancy decline is tied not to surging demand but to shrinking inventory. Developers and owners are actively removing obsolete office space Improvements to page 36