CBRE

FIGURES|MINNEAPOLIS/ST.PAULINDUSTRIAL|Q42025

ActivityintheNorthwestandEastsubmarkets

drivesyear-enddemand

3.8%

DirectVacancyRate

610,728

SFNetAbsorption

831,664

SFConstructionDelivered

3.0M

SFUnderConstruction

$9.34

NNN/YRDirectLeaseRate

Note:Arrowsindicatechangefrompreviousquarter.

SUMMARY

-IntheMinneapolis/St.PaulIndustrialmarket,over610ksq.ft.ofpositivenetabsorptionwasseeninQ4.Year-to-datethemarketabsorbedover3.6millionsq.ft.

-ConstructiondeliveredinQ4contributed831,664sq.ft.,bringingtheyear-to-datetotaltonearly3.3Msq.ft,a1.5%increaseyear-over-year.Build-to-suitdevelopmentsconstituted80%ofthe3Msq.ft.underwayatyearend.

-Thedirectvacancyrateremainedconsistentat3.8%.InQ4,theEastsubmarkethadthe

largestdropinvacancyquarter-over-quarter,downto6.8%from8.9%inQ3.ThisislargelyduetoSuperiorLogisticsoccupying252ksq.ft.

-Q4leasingactivityreachedover3Msq.ft.,a24.6%increasequarter-over-quarter.Newleasessignedaccountedfor59.6%whilerenewalscontributed28.8%.

-Industrialsalesvolumetotaledover$447MinQ4,a22.9%increasequarter-over-quarter.The2025totalsalesvolumewas$1.68B.

FIGURE1:HistoricalAbsorption,Deliveries,andVacancy

Sq.Ft.millionsVacancy%

5.05

4.55

4.04

3.54

3.03

2.53

2.02

1.52

1.01

0.51

0.00

NetAbsorptionDeliveriesVacancyRate

Source:CBREResearch,Q42025

1

CBRERESEARCH?2025CBRE,INC.

FIGURES|MINNEAPOLIS/ST.PAULINDUSTRIAL|Q42025

2CBRERESEARCH?2025CBRE,INC.

NetAbsorption

NetabsorptioninMinneapolis/St.Paulwaspositive610ksq.ftinQ42025,adecreasefrom

positive1.1Msq.ftinthepreviousquarter,anda51.8%decreaseyear-over-year.In2025,the

markethasabsorbedover3.6Msq.ft.adecreasefrom4.3Msq.ft.in2024and38.5%belowthemarket’s5-yearaverageannualabsorption.

OfficeWarehouseprovidedthehighestvolumeofnetabsorptioninQ4with1.1Msq.ft.TheEastledthesubmarketswiththelargestcontributionofpositiveabsorptionat435ksq.ft.,71.3%ofthemarkettotal.

Buildingsconstructedafter2020supportedthisquarter’sabsorptionwith535ksq.ft.inpositiveabsorption,over87.5%ofQ4numbers.Year-to-date,modernbuildingshavecontributed73.4%,ornearly2.6Msq.ft.ofthe3.6Msq.ft.inpositivenetabsorptionin2025.

ConstructionActivity

InQ42025therewere17projectsunderway,totalingover3.0Msq.ft.,a21%decreasequarter-over-quarter.BuildtoSuit(BTS)projectsrepresented79%ofdevelopmentsunderconstruction.

Sevenprojectsweredeliveredthisquarter,totaling831,664sq.ft.,ofthem73%werespec

projectswithanoverallpreleaserateof14.3%.Projectsdeliveredinclude;ArborLakesBusinessParkIXinMapleGrove,Lakeville35LogisticsCenterI,SevenLakesIIIinShoreview,LexingtonPreserveVinBlaine,andHighway-5BusinessCenterinEdenPrairie.

In2025,theMinneapolis/St.Paulmarkethad25buildingsdelivered,totalinginnearly3.3Msq.ft.ItwasthesecondconsecutiveyearwhereBTSpursuitsaccountedformajorityoftheprojectsoverspeculativedevelopment.TheNorthwestsubmarketsawthelargestsquarefootageof

buildingsdeliveredin2025withover1.3Msq.ft.,40%ofthetotaldeliveriesmarket-wide.

FIGURE4:NetAbsorptionTrend

Sq.Ft.millions

2.0

1.8

1.6

1.4

1.2

1.0

0.8

0.6

0.4

0.2

0.0

NetAbsorptionRolling4QAvg.

Source:CBREResearch,Q42025

FIGURE5:ConstructionActivity

Sq.Ft.millions

12.0

8.0

6.0

4.0

2.0

10.0

0.0

UnderConstructionDeliveries

Source:CBREResearch,Q42025

FIGURES|MINNEAPOLIS/ST.PAULINDUSTRIAL|Q42025

3CBRERESEARCH?2025CBRE,INC.

AvailabilityRate

TheMinneapolis/St.Paulindustrialmarketreportedadirectvacancyof3.8%inQ4,unchangedfromthepreviousquarter.Newconstructiondeliveredthisquartercontributedanadditional520ksq.ft.ofvacantspace.

TheEastsubmarketsawthelargestdropinvacancyfromlastquarter’s8.9%to6.8%.This

notabledropisduetotheOwnerUsersalefromSuperiorLogisticsinRamsey,occupying252ksq.ftofvacantspacethisquarter.

Themarketavailabilityfeltaslightincreaseof5bpsat6.5%.Directavailabilityremained

unchangedat5.9%withsubleaseavailabilityincreasingupby10bpsto0.9%.BulkWarehouseproductmaintainedthelowestavailabilityrateat4.6%,comparedto7.3%forOfficeWarehouse,and7.4%forOfficeShowroom.

AskingRent

TheMinneapolis/St.Paulindustrialmarketexperiencedaslightincreaseof30bpsinthe

averagenet-blendedaskingrate,quarter-over-quarter,bringingitto$9.34(+$0.03).Thiswasa7.6%increaseyear-over-year.

InQ4theaverageOfficeWarehouserateswere$9.51,andOfficeShowroomrateswere$10.95,BulkWarehousewastheonlyindustrialsubtypethatdidnotexperiencepositivegaininaveragerates,at$9.90.

TheMinneapolis,East,andMidwaysubmarketsledthemarketwiththehighestaskingratesof$10.47,$9.92,and$9.85,respectively.Thesechangesarelargelyduetothenegotiablerangeofratesinnewconstruction.

FIGURE2:AvailabilityRates

AvailabilityRate(%)

7

6

5

4

3

2

1

0

OverallDirectSublease

Source:CBREResearch,Q42025

FIGURE3:Avg.DirectAskingRate(NNN/YR)

$/SF

11.0010.5010.009.509.008.508.007.50

7.00

Source:CBREResearch,Q42025

FIGURES|MINNEAPOLIS/ST.PAULINDUSTRIAL|Q42025

4CBRERESEARCH?2025CBRE,INC.

LeasingActivity

Q4leasingactivity(inclusiveofallsizes)intheMinneapolis/St.Paulmarketreachednearly

2.8Msq.ft.,representinga14.3%increasefromthepreviousquarter.Year-to-date,over11.3Msq.ft.ofleasetransactionshavebeencompleted,down14.7%from2024.Thenumberofdealsyear-to-datereached594,up29.4%from459in2024.

Oftheleasessignedthisquarter,54.4%ofthetotalvolumewereleasessmallerthan50,000sq.ft.Leasingvolumeforleasesgreaterthan50,000sq.ft.accountedforover1.2Msq.ft.There

werethreetransactionsgreaterthan100,000sq.ft.completedinQ4,contributing22.3%tothetotalvolume.

Theaveragearealeased,inclusiveofallsizes,inQ4reachedover19.6ksq.ft.,a3.1%increasequarter-over-quarteranda41.2%decreaseyear-over-year.ThenumberofleasessignedinQ4amountedto142,anincreasefrom133inQ42024.

65,419

East

180,405

SouthCentral

198,516

Southwest

409,027

Midway

421,990

Northwest

FIGURE6:LeasingActivitybySubmarket–Leases50,000sq.ft.andup

Source:CBREResearch,Q42025

FIGURE6:LeasingActivityTrend–Leases50,000sq.ft.andup

3.5M

3.0M

2.5M

2.0M

1.5M

1.0M

500K

Sq.Ft.MillionsOverall3-YearAverage

0

Source:CBREResearch,Q42025

FIGURE8:KeyLeaseTransactions

TenantSq.Ft.LeasedTransactionTypeAddressSubmarket

186,174

Renewal

Midway

EstesTransportation

2228TerritorialRd

140,400

7070CretexAveE

Southwest

NewLease

APEXInternationalMFG

TEConnectivity100,384Renewal5905TrentonLnNNorthwest

95,573

Computershare

Renewal

Midway

1021-104910thAveS

91,163

Northwest

PHSWest

NewLease

10585CountyRoad101

85,925

TriMarkHockenbergs

Renewal

Northwest

13098GeorgeWeberDr

BergariSolutions78,045NewLease147thStreetSouthCentral

TotalExport74,883NewLease3101EHennepinAveMidway

ProcessDisplaysCo.

72,731

NewLease

7101-7109N31stAve

Northwest

Source:CBREResearch,Q42025

FIGURES|MINNEAPOLIS/ST.PAULINDUSTRIAL|Q42025

5CBRERESEARCH?2025CBRE,INC.

SalesActivity

TheMinneapolis/St.Paulmarketindustrialsalesvolumetotaledover$447MinQ42025,representinga22.9%growthquarter-over-quarteranda34%decreaseyear-over-year.

Ofthetotalvolume,investmentsalesaccountedforover80%.OfficeWarehouseaccountedfor49%ofthisquarter’stotalsalesvolume,followedbyBulkWarehouseat29%.Severalportfoliosaleswerelistedastopsales,including;ParkIndustrialVillage,MapleGroveIndustrialCenter,andCommersDriveproperties.

The2025totalsalesvolumereachedover$1.68B,CBRErepresentedsomeofthetopsalesinthemarketthisyear,includingtheNorthParkPortfolioSaleinQ3for$63M,UnitedPropertiesPortfoliosaleinQ3for$57M,CapstoneQuadrangleMNIndustrialPortfolioinQ2for$33M,andTaurusPortfoliosaleinQ1for$76M.

FIGURE9:KeySaleTransactions,Q42025

Property

Submarket

Buyer

SalesPrice

Size(SF)

PricePerSF

BAESystems

Northwest

LCNCapitalPartners

$92M

248,000

$370.97

ParkIndustrialVillage

Northwest

UnilevCapitalGroup

$26M

234,605

$110.82

MapleGroveIndustrialCenter

Northwest

Enclave

$24.5M

255,501

$95.95

10900RedCircleDrive

Southwest

SyndicatedEquities

$23M

98,000

$235.40

4Front

East

OneLibertyProperties

$23M

199,919

$115.05

2945&2985CommersDrive

SouthCentral

Hempel

$18M

200,000

$90.36

Source:CoStar,CBREResearch,Q42025

300%

250%

200%

150%

100%

50%

0%

-50%

-100%

FIGURE10:IndustrialYearoverYearchangeinQuarterlySalesVolume

Q1

Q2Q3

2022

Q4

Q1

Q2Q3

2023

Q4

Q1

Q2Q3

2024

Q4

Q1

Q2Q3

2025

Q4

1400M

1200M

1000M

800M

600M

400M

200M

0

Source:CoStar,CBREResearch,Q42025

FIGURE11:Investmentvs.OwnerUserSalesVolume

Volume($)InvestmentOwner/User%OwnerUser

Q1

Q2Q3

2022

Q4

Q1

Q2Q3

2023

Q4

Q1

Q2Q3

2024

Q4

Q1

Q2Q3

2025

Q4

Source:CoStar,CBREResearch,Q42025

70%

60%

50%

40%

30%

20%

10%

0%

FIGURES|MINNEAPOLIS/ST.PAULINDUSTRIAL|Q42025

6CBRERESEARCH?2025CBRE,INC.

MarketStatisticsbySize

NetRentableArea

DirectVacancy

TotalAvailability

DirectAvailability

SubleaseAvailability

Avg.DirectAsking

Rate(NNN/YR)

CurrentQuarterNet

AbsorptionYTDNetAbsorption

Deliveries

UnderConstruction

Under100,000sq.ft.

129,417,738

3.0

4.3

4.1

0.2

8.53

210,274366,082

219,732

364,630

100,000-199,999sq.ft.

90,195,180

4.7

8.5

7.1

1.4

9.08

476,6791,455,106

611,932

1,037,123

200,000-299,999sq.ft.

40,238,918

5.5

10.1

8.5

1.5

9.42

226,069605,883

0

951,358

300,000-499,999sq.ft.

34,681,819

3.2

8.5

6.6

1.9

11.49

102,648680,914

0

0

500,000-749,999sq.ft.

14,863,977

4.4

4.4

4.4

0.0

-

(420,600)(369,662)

0

652,054

750,000sq.ft.

13,640,153

1.1

1.1

1.1

0.0

4.20

15,658865,285

0

0

Total

323,037,785

3.8

6.5

5.6

0.9

9.34

610,7283,603,608

831,664

3,005,165

MarketStatisticsbyProductType

NetRentableArea

DirectVacancy

TotalAvailability

DirectAvailability

SubleaseAvailability

Avg.DirectAsking

Rate(NNN/YR)

CurrentQuarterNet

AbsorptionYTDNetAbsorption

Deliveries

UnderConstruction

Distribution/Logistics

198,566,729

4.4

7.4

6.5

0.9

9.26

1,131,3313,250,777

831,664

2,037,715

Manufacturing

69,207,226

1.7

4.4

3.1

1.3

7.58

(542,106)425,717

0

305,820

R&D/Flex

36,098,277

5.1

7.4

7.0

0.4

9.96

(4,047)11,751

0

276,630

OtherIndustrial

19,165,553

3.3

2.9

2.7

0.2

10.07

25,550(84,637)

0

385,000

Total

323,037,785

3.8

6.5

5.6

0.9

9.34

610,7283,603,608

831,664

3,005,165

FIGURES|MINNEAPOLIS/ST.PAULINDUSTRIAL|Q42025

7CBRERESEARCH?2025CBRE,INC.

MarketStatisticsbySubmarket

NetRentableArea

DirectVacancy

TotalAvailability

DirectAvailability

SubleaseAvailability

Avg.DirectAsking

Rate(NNN/YR)

CurrentQuarterNet

Absorption

YTDNetAbsorption

Deliveries

UnderConstruction

East

20,482,847

6.8

7.9

7.6

0.3

9.92

435,343

802,956

0

225,550

Midway

25,857,727

2.8

3.5

3.0

0.5

9.85

(26,778)

14,813

0

0

Minneapolis

18,724,670

5.0

3.0

2.8

0.1

10.47

20,161

143,157

0

0

NorthCentral

48,970,800

4.4

5.4

4.7

0.7

8.8

(119,615)

64,152

391,986

375,276

Northwest

78,597,793

1.4

5.6

4.8

0.8

9.3

292,025

2,317,904

198,000

374,120

SouthCentral

50,626,716

3.4

7.9

6.8

1.1

7.74

(151,313)

(384,619)

189,678

1,069,342

Southwest

66,746,146

2.9

9.4

7.7

1.7

9.82

143,754

707,568

52,000

785,877

StPaul

13,031,086

3.5

5.5

5.4

0.1

6.83

17,151

(62,323)

0

175,000

Total

323,037,785

3.8

6.5

5.6

0.9

9.34

610,728

3,603,608

831,664

3,005,165

FIGURES|MINNEAPOLIS/ST.PAULINDUSTRIAL|Q42025

8CBRERESEARCH?2025CBRE,INC.

NationalEconomicOverview

TheU.S.economyissendingsomemixedsignals.Financialmarketsarefocusedontheupside,particularlyAI’ssizablecontributiontogrowthinrecentquarters.Some

indicatorsofbusinessactivity,suchascapitalgoodsorders,areimproving,and

strengtheningcreditmarketsarehelpingtousherrealestateintoanewcycle.Thepicturegetsmoremelancholywhenlookingathouseholds.Consumerconfidenceremainsweak,withspendingreportedlydrivenbyasmallersegmentofaffluent

households.

ThismosaicofdatasuggeststhatannualaverageGDPgrowthwillbesteadyin2026,at2%,butatouchsofterthanin2025.Akeycatalystisasofterlabormarket,as

companiesare‘slowtohire,slowtofire’—atrendthatislikelytolastafewquarters.Aconsequenceofthisoutlookissofterinflationandlong-termbondyieldstrendingjustbelow4%byH22026.

Minneapolis/St.PaulEmploymentUpdate

3.6%

UnemploymentRate

2.1M

LaborForce

460.1k

OfficeUsingJobs

547.4k

IndustrialUsingJobs

258.4k

RetailUsingJobs

EmploymentChangebySector–Yearly+MonthlyBarsindicateyearlytrend,arrowsindicatemonthlytrend

Source:USBLS,September2025

Minneapolis/St.PaulUnemploymentRateandLaborForceTrends

LaborForceTotalLaborForceUnemploymentRate

2.2M14%

12%

2.1M10%

8%

2.0M

6%

1.9M4%

2%

1.8M0%

2019202020212022202320242025

Source:USBLS,September2025

FlGURES|MlNNEAPOLlS/ST.PAULlNDUSTRlAL|Q42025

CBRE

9CBRERESEARCH?2025CBRE,lNC.

MarketAreaOverview

Definitions

?AvailableSq.Ft.:Spaceinabuilding,readyforoccupancywithinsixmonths;canbeoccupiedorvacant.

?AvailabilityRate:TotalAvailableSq.Ft.dividedbythetotalbuildingArea.

?AverageAskingLeaseRate:Acalculatedaveragethatincludesnetandgrossleaserate,weightedbytheircorrespondingavailablesquarefootage.

?BuildingArea:Thetotalfloorareasq.ft.ofthebuilding,typicallytakenatthe“dripline”ofthebuilding.

?GrossActivity:Allsaleandleasetransactionscompletedwithinaspecifiedtimeperiod.Excludesinvestmentsaletransactions.

?GrossLeaseRate:Renttypicallyincludesrealpropertytaxes,buildinginsurance,andmajormaintenance.

?NetAbsorption:ThechangeinOccupiedSq.Ft.fromoneperiodtothenext.

?NetLeaseRate:Rentexcludesoneormoreofthe”net”costs(realpropertytaxes,buildinginsurance,andmajormaintenance)typicallyincludedinaGrossLeaseRate.

?Net-BlendedRate:Acalculatedaverageofthew