According to all pertinent statistics, downtown Minneapolis continues to grow - in a healthy way. Since 2006, the population has increased 56 percent; more than 205,000 employees fill downtown jobs. Last year, the city welcomed 33 million business and leisure visitors, for a total of 2,301,040 hotel room nights occupied.
A whopping 80.7 million rides were recorded by Metro Transit, with another 53.3 million rides recorded on city buses. Expansion is planned for both light rail and bus routes. Nearly 40 percent of the city's office space is within the central business district, and nearly 460,000 square feet of Class A office space was absorbed in 2018 alone. For the seventh straight year, the value of building permits topped $1 billion.
The picture for St. Paul is similarly rosy. According to a mid-2018 CNBC report, the Twin Cities urban area is "fast-becoming one of the most business friendly regions in the nation." Reasons cited include a low unemployment rate, a reasonable cost of living, only about one percent above the national average, and a high level of college attainment, at 40.5 percent.
What Fuels the Continuing Growth and Stability?
Minnesota's Twin Cities are considered to be both business-oriented and family-friendly, a sure-fire combination for growth.
The greater Minneapolis-St. Paul region continues to lure young professionals at a rate higher than competing cities. The area adding 28,000 jobs the first three quarters of 2018, constituting a more than six percent growth rate. Projections call for an additional 12 percent growth over the next 20 years. The Midwest location is viewed as an advantage, approximately equidistant between the coasts, and within about a three-hour flight of anywhere in the continental United States - with a great airport in the form of the MSP, or the Minneapolis St. Paul International Airport.
In addition, the area is a hub for innovation, according to a University of Minnesota law professor Myron Orfield, who adds that add least 35 colleges and universities are in the immediate vicinity to provide companies with enthusiastic and well-trained new employees. The cities have also, for varying reasons, been able to attract highly-qualified foreign-born residents.
Finally, the types of firms with headquarters and/or major employment centers in Minneapolis-St. Paul reads like a "Who's Who" of American business, ranging across the diverse fields of finance and healthcare, retail, agriculture and food, to the overlapping fields of sports, recreation, hospitality and travel. Tourism also is a factor in the current growth boom and continuing regional development.
The New Face of Downtown
To be sure, the downtown faces of both St. Paul and Minneapolis have changed. Changes will no doubt continue, with new challenges to be faced not only by city planners and developers, but also by the state legislature. However, the overall view from all quarters is positive at this point in time.
A new version of mixed use development has emerged in both cities' downtown cores. More than 50,000 people now call downtown Minneapolis home, an increase of 14.5 percent over 2017. Currently, there are more than 2,300 rental apartment units under construction, with about half of the $1.8 billion in building permits issued in downtown wards.
Concurrent with new housing, there is a corresponding desire for green spaces and dog parks, grocery stores and casual eateries, off-street parking, retail shops and entertainment venues, fitness centers and internet cafes. However, it's not all about the amenities. Those needs all bode well for commercial development.
Housing affordability is a prime concerns as well. Housing affordability over the long term needs to be addressed. At the current time, there is no doubt that it is less expensive to live in surrounding suburbs than in the urban core. Though interest in housing and commercial buildings has increased in surrounding areas like Carver County. There are some who decry the currend trend: Renovating older buildings into amenity-filled expensive urban condos is deemed unsustainable over the long term. Affordability strategies are both necessary and challenging.
On the upside, though, there is ample opportunity for entrepreneurial ventures, and the lively downtown atmospere holds promise for both urban residents and downtown workers. It is a dynamic that has not escaped the notice of investors. And there is every reason to believe that the Twin Cities will continue to enjoy a healthy future in terms of commercial real estate opportunities.