Minneapolis–St. Paul

Operating expenses and taxes drive up real estate costs in Minneapolis CBD

Chart of the week: May 23, 2016

Source: JLL Research

• Average operating expenses and taxes for Class A office space in the Minneapolis CBD jumped 5.8 percent between 2015 and 2016. Post-recession (2012-2013), increases in pass-through expenses were driven by rising operating expenses, in part to fund building renovations and investment. However, this most recent uptick is driven by escalating property taxes, as average taxes per square foot per year jumped from $5.32 to $6.07—a significant 14.0 percent increase. The good news: the bump in taxes is due to healthy and growing office property values while the tax rate remains relatively stable.

2012 2013 2014 2015 2016$11

$12

$13

$14

$15

$12.46$12.64

$13.19 $13.30

$14.20

Average operating expenses & taxesMinneapolis CBD Class A Office