Robust Demand Keeps Occupancy Up in the Twin Cities

The metro’s multifamily market is an investor magnet, boosted by the presence of Fortune 500 companies and a strong education system, which continue to attract new residents to the region.
Twin Cities rent evolution, click to enlarge
Twin Cities rent evolution, click to enlarge

Boasting strong population growth and accelerated job gains, the Twin Cities has become a magnet for multifamily investors. Meanwhile, solid demand has kept stabilized properties across the metro near full occupancy—97.2 percent as of February, the highest rate among major U.S. metros.

Anchored by several Fortune 500 companies and a strong education system, the Twin Cities added almost 48,000 jobs in 2017. Education and health services continues to lead job growth, with more than 13,000 new positions. Fueled by strong development along major thoroughfares, the transportation and construction sectors generated 16,500 jobs and are likely to continue to be an important employment engine. United Properties revealed design plans for a 33-story tower on the north end of Nicollet Mall in Minneapolis, a project that is estimated to cost about $330 million. Additionally, Vermillion Development intends to convert a block along the Green Line in Prospect Park to condos, apartments and commercial space.

Roughly 7,500 units were under construction in the metro as of March, with the completion of new luxury projects and the repositioning of several value-add properties providing an additional boost to rents. Demand coming from the working-class segment is also poised to remain high, leading Yardi Matrix to forecast rent growth of 3.7 percent in 2018.

Read the full Yardi Matrix report.