Twin Cities office vacancies among highest in the U.S.
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The Twin Cities has one of the highest office vacancy rates in the country, ranking 14th out of 79 metro areas, according to data from Moody's Analytics.
Why it matters: Office buildings both locally and nationally are emptying as companies continue to adapt to the new norms of remote and hybrid work.
The latest: While Minneapolis Mayor Jacob Frey and others have called for big corporations to bring their workers back into the office, it appears company leaders have already moved past that idea.
- Just six out of 158 U.S. CEOs said they'll prioritize bringing workers back to the office full-time in 2024, according to a new survey released by the Conference Board, writes Axios' Emily Peck.
State of play: "Remote work appears likely to be the most persistent economic legacy of the pandemic," write Goldman Sachs economists in a recent note.
Between the lines: For office landlords this isn't great. But overall, the high vacancy rate has been priced into the market, so the systemic risk posed by the office sector appears fairly minimal, Peck writes.
- Moody's "does not believe this will become a source of systemic risk for the overall banking system."
Yes, but: The owners of these office buildings pay huge property tax bills, and as their vacancy rises, their values fall. That shifts the burden onto residential property taxpayers.
- Aside from one 18 story North Loop tower going up, developers have halted future office projects in the Twin Cities.