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Midwest Market Reports

Market ReportsMidwestMidwest Market ReportsMinnesotaMultifamily

Twin Cities Apartment Market Enters Period of Recalibration

by Kristin Harlow

By Chris Collins, Marcus & Millichap The Minneapolis–St. Paul apartment market is currently experiencing a transformation, shaped by shifting economic conditions, changing demographics and evolving public policy. Having strong fundamentals in past multifamily housing development, the Twin Cities have entered a period of recalibration.  After years of record-breaking development numbers, the construction pipeline has slowed dramatically, while demand remains across the metro. Like many markets, the Twin Cities face affordability challenges, aging populations and regulatory uncertainty. A major factor of the current market is the sharp decrease in new apartment construction. Following a peak in multifamily housing permits of more than 15,000 in 2022, the Twin Cities saw a sharp decline to just 7,400 from April 2024 to March 2025. This steep reduction is largely driven by public policy such as rent control, operating costs and rising construction costs, which now average in the low to mid-$300,000 per unit, while the market value of newly built apartments hovers near $250,000.  As a result, many developers find it financially unfeasible to break ground on new projects without substantial public subsidies. The construction pipeline has declined by more than 50 percent from its peak, and the number of units under construction will …

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IndustrialMarket ReportsMidwestMidwest Market ReportsMinnesota

Minneapolis-St. Paul Industrial Market Is Proving its Staying Power

by Kristin Harlow

By Joe Mahoney, Opus In today’s industrial landscape, where some U.S. metros are grappling with double-digit vacancies and an oversupply of speculative product, the Minneapolis-St. Paul metropolitan area continues to stand apart. With consistently strong fundamentals, measured development, disciplined absorption and diverse demand, the Twin Cities have historically avoided the peaks and valleys of fluctuating supply and demand that plague other cities. Looking at current data, during the first two quarters of 2025, industrial vacancies here hovered around 4 percent while the national average was 9.3 percent, according to CBRE. In fact, the Twin Cities have the fifth lowest industrial vacancy rate in the country.  Steadfast economics This stability is no accident. The Twin Cities of Minneapolis and St. Paul rank as the 13th largest industrial market in the country due to a number of factors. Among the most impactful, they have a robust corporate base that includes 17 Fortune 500 companies in industries ranging from manufacturing, technology, agriculture and healthcare to medtech, energy, retail and financial services. This diversity helps drive consistent demand. In addition, above-average wages that outpace inflation, below-average unemployment rates and above-average job growth, household resiliency and demographic stability together help make Minnesota a good place …

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Market ReportsMidwestMidwest Market ReportsMultifamily

How to Design for Multifamily Growth in the Midwest

by Kristin Harlow

By Yanitza Brongers-Marrero, Moody Nolan Rent growth in cities across the Midwest is booming, encouraging developers and municipalities alike to ramp up investment in the region. As interest shifts away from coastal markets that became overbuilt during the pandemic, the Midwest’s stability and growth potential are coming into sharper focus.  Columbus, Ohio, is leading the charge with adding 30,348 new residents in the past year, a 1.4 percent growth rate that outpaces both the national (1 percent) and Midwest (0.6 percent) averages, according to the latest U.S. Census estimates. Projections suggest the region could gain another million residents by 2050, underscoring its long-term demand for housing.  Chicago, meanwhile, remains the Midwest’s economic engine. The metro area ranks third in the U.S. by GDP at $860 billion and saw a 4.6 percent year-over-year rent growth in June, according to CoStar. The city also added 22,164 residents from mid-2023 to mid-2024, marking the seventh-largest population gain in the U.S.  Together, these cities, along with Minneapolis, are shaping the next chapter of multifamily investment and housing innovation in the Midwest.  What are the major influences you’re seeing fuel the growth in demand for multifamily projects in the Midwest?  Being five years out from …

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IowaMarket ReportsMidwestMidwest Market Reports

Cedar Rapids Continues Unprecedented Growth

by Kristin Harlow

By Scott Olson, Skogman Commercial Each year when I update exciting growth in Iowa’s second largest city, it is hard to imagine the pace can continue despite what we hear nationally about high interest rates, tariffs and inflation. Plus, this great city adapts after natural disasters to quickly recover and create a better place to work and call home. Our latest national rankings reflect this effort, skill and dedication: • No. 1 city for affordable housing in America (WalletHub, 2025) • No. 3 best place to live in the Midwest (Spacewise, 2025) • No. 12 best city for economic opportunity (U.S. News & World Report, 2025) • No. 4 city with most affordable rent (WalletHub, 2025) • No. 17 best city to buy a house in America (Niche.com, 2025) • A top 100 best city for jobs in America (WalletHub, 2025) • A top 100 best place to retire in America (Niche.com, 2025) • No. 7 safest city in America (WalletHub, 2025) • No. 33 best run city in America (WalletHub 2024, top 40 ranking since 2017) In fall 2024, the City of Cedar Rapids was selected to participate in the Bloomberg Harvard Innovation Track as a continuation of the …

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IowaMarket ReportsMidwestMidwest Market Reports

Investment from Tech Companies, Developers Shows Potential of Quad Cities

by Kristin Harlow

By Chris Beason, NAI Ruhl Commercial Co. As we move through 2025, the commercial real estate market in the Quad Cities region continues to adjust to tighter capital markets, rising costs and evolving consumer and business preferences. The bi-state region of the Quad Cities includes Moline, East Moline and Rock Island, Illinois; and Davenport and Bettendorf, Iowa, as the main core cities. The Quad Cities is the largest metro area between St. Louis and Minneapolis on the Mississippi River. When you look at the fundamentals like industrial absorption, land sales and retail demand, the Quad Cities continues to outperform expectations. The level of investment we’re seeing from both global tech companies and regional developers shows long-term confidence in the strength and potential of our market. Pivotal year for industrial The Quad Cities market mirrored the national trends with increased development of industrial buildings and rising rental rates. While the new industrial development we have seen locally over the past three years is to be celebrated, there is still a shortage of smaller 10,000- to 50,000-square-foot buildings. This is especially true for companies that desire to purchase real estate. There is significantly more inventory for lease of smaller product available than …

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IndustrialMarket ReportsMidwestMidwest Market ReportsOhio

Why Industrial Users Are Taking a Closer Look at Cleveland

by Kristin Harlow

By David Stecker, JLL As advanced manufacturing reshapes industrial real estate across the Midwest, Cleveland is emerging as a quietly powerful hub — offering scalable space, a strategic location and infrastructure ideal for high-growth sectors. While other Midwest metros have gained national attention for headline-grabbing investments, Cleveland is carving out its own unique path to growth, supported by advanced industries, a skilled workforce and a strong real estate foundation. The region’s industrial market remains competitive and resilient, even amid broader economic headwinds. Despite the recent move-out of Joann Fabric’s 1.4 million-square-foot facility in Summit County, overall fundamentals remain healthy, and Class A space is in especially high demand.  For high-tech and manufacturing users seeking logistics-ready facilities in a cost-effective market, Cleveland delivers — offering the right mix of space, speed and strategic location that today’s industrial users are actively pursuing. A market of opportunity According to JLL’s second-quarter 2025 Cleveland Industrial Insights Report, total vacancy in the market sat at 3.8 percent. While this represents a slight uptick following Joann’s exit, it still signals robust market health. Class A availability is especially tight, driven by a wave of large leases signed in newly developed properties. That momentum is putting upward …

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IndustrialMarket ReportsMidwestMidwest Market ReportsOhio

Cincinnati Industrial Sector Sees Resilient Fundamentals Amid Short-Term Headwinds

by Kristin Harlow

By Andrew Jacob, Colliers The Cincinnati/Northern Kentucky industrial market demonstrated notable resilience in the second quarter of 2025, balancing strong long-term fundamentals with cautious short-term sentiment. Amid national headlines of slowing industrial demand and heightened uncertainty, the region continues to distinguish itself with a combination of strategic location, steady demand and disciplined development. Market fundamentals At the close of the second quarter, the market’s total inventory stood at approximately 293.6 million square feet, supported by a healthy vacancy rate of 5.2 percent, which remains below the national average of 7.1 percent. Bulk warehouse asking rates have remained relatively steady at $5.95 per square foot, reflecting a market rebalancing after several years of oversupply from robust development activity.  In contrast, flex space asking rates continue to climb, now averaging $8.11 per square foot. This upward pressure is fueled by a scarcity of new supply — driven by land constraints and elevated construction costs. The market recorded 539,000 square feet of positive net absorption in the second quarter, bringing the year-to-date total to over 1 million square feet. This consistent absorption highlights enduring occupier demand despite broader caution in the national market. New construction activity continued at a measured pace, with 2 …

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Market ReportsMidwestMidwest Market ReportsOfficeOhio

Niche Demand, Medical Momentum Define Second-Quarter Office Market in Cincinnati

by Kristin Harlow

By Brooke Jacobsen, Colliers The Greater Cincinnati and Northern Kentucky office market is weathering the post-pandemic era with surprising nuance. While national headlines continue to focus on uncertainty and high vacancy, the local market is quietly seeing stable, albeit selective, activity, especially in healthcare and specialized user segments. After a slow winter, leasing activity across the region began to thaw in the second quarter of 2025. Year-to-date net absorption remains slightly negative, but market sentiment is gradually shifting, particularly among small to mid-size tenants. Most of the deal activity is coming from users in the 2,500- to 5,000-square-foot range, with several groups focused on healthcare and logistics services. Cincinnati’s Class B and C office space is seeing an unexpected level of demand, driven by affordability, location flexibility and users with highly specific space needs. Medical office continues to stand out as one of the most active sectors. Demand is strong across both urban and suburban submarkets, with notable traction in Cincinnati submarkets. Much of the recent healthcare-related activity has come from specialty practices, private groups and regional health systems looking to reposition their outpatient services. While Northern Kentucky offers value, many users are choosing to locate on the Cincinnati side …

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Market ReportsMichiganMidwestMidwest Market ReportsRetail

Retail Realignment Continues Amid Muted Development, Diverging Tenant Demand in Detroit

by Kristin Harlow

By Ashish Vakhariya, Marcus & Millichap Detroit’s retail market continues to show pockets of strength amid broader economic and retail sector headwinds. More affluent northern suburbs and the revitalizing urban core have demonstrated greater resilience, while limited construction activity should support the backfilling of existing space. Detroit’s position among the highest-yielding metros in the country will likely remain a key draw for investors, with capital focusing on well-located, necessity-based and service-oriented retail assets. Big-box downsizing and rising cost pressures create a cautious leasing environment: Detroit’s retail landscape recorded more than 1 million square feet of negative net absorption over the nine months that ended in March, with preliminary second-quarter figures indicating continued space relinquishment. Strained consumer demand and structurally challenged retail formats have contributed to a wave of bankruptcies and consolidations among major tenants, including Party City, Big Lots, Macy’s and Walgreens.  Trade policy uncertainty has further heightened tenant caution, as elevated input costs are expected to weigh on leasing activity. A recent Michigan Retailers Association survey found that more than 60 percent of businesses statewide rely on imported goods.  With consumers more price-sensitive, many retailers may struggle to pass on higher costs; however, tenants reliant on locally sourced inventory …

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Market ReportsMidwestMidwest Market ReportsOffice

Smart Design, Outdoor Spaces and Sustainability Help Reimagine the Office

by Kristin Harlow

By Maria Davis and Colton Rupprecht, R&R Real Estate Advisors In the real estate industry, customer expectations around office space have undergone a significant shift — both in what they need and what they want. It’s not just about square footage anymore; it’s about how that space functions, feels and aligns with the values of the companies who occupy it.  This transformation is playing out in three critical areas: the rise of small, amenity-packed spaces; a surge in outdoor-focused design that brings the comforts of home into the workplace; and a more rooted and interactive approach to sustainability.  Smarter spaces As more companies return to in-office work, many are rethinking how they use space — prioritizing flight to quality. Increasingly, customers are gravitating toward compact offices that offer high-impact amenities rather than expansive square footage. These smaller footprints are more efficient, but they also demand more thoughtful design and planning. Technology is key in amenity designing, as efficient developers are integrating infrastructure that anticipates the needs of a tech-forward workforce. Whether it’s bracketing out spaces for high-speed fiber and built-in video conferencing hubs or artificial intelligence (AI)-powered building systems that manage lighting, the design is important in making a more …

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