Twin Cities Occupancy Rates Remain Sky-High
Favorable demographic and employment trends sustain strong multifamily demand across the metro, where rent growth continues to outperform the national average.
Underpinned by strong population growth and solid demand, the Twin Cities multifamily market remains healthy. Rent growth continues to outperform the national average, clocking in at 3.6 percent year-over-year as of August, 50 basis points above the U.S. figure.
Fueled by the hosting of the Super Bowl, the metro’s leisure and hospitality sector led job gains, adding 9,500 positions in the 12 months ending in June. Additionally, of the total 42,400 jobs gained, more than one-third were in the manufacturing and trade, transportation and utilities sectors. The latter is likely to get a noteworthy boost from the planned $2 billion Light Rail Transit project. Construction is also creating new jobs, with several large projects in the works, including the $200 million Major League Soccer stadium and the $500 million Minnesota Vikings project.
Roughly 8,300 units were underway as of August, the vast majority being in upscale developments. That’s on par with last year despite the ongoing labor shortage, high land prices and regulatory hurdles, with working-class renters being hit the most. The occupancy rate, although down 60 basis points over 12 months, remains one of the highest in the U.S.—97.3 percent as of July, second only to New York City. Yardi Matrix expects the average Twin Cities rent to rise 4.0 percent in 2018.