Investing in Minneapolis
Minneapolis, MN, is not just a cultural and economic hub but also an excellent destination for investors looking to diversify their portfolios. Minneapolis possesses a varied economic landscape encompassing several prominent sectors. With a city population exceeding 400,000 and a metropolitan population surpassing 3.6 million, investment opportunities sit around every corner. Over the past few years, Minneapolis has become an appealing destination for CRE investors; here’s why:
Strong Job Market and Diverse Economy
One of the primary benefits of investing in Minneapolis lies in its robust job market. The city boasts diverse industries, including healthcare, finance, technology, and retail, which generate a consistent flow of employment opportunities and attract a substantial number of residents.
Minneapolis boasts a solid basis of skilled workforce and talent, innovation and technology, infrastructure, and excellent quality of life. These factors are instrumental in propelling the growth and accomplishments of businesses, attracting numerous global giants to establish and expand their operations in the region.
The state is home to 16 renowned Fortune 500 companies, including 3M, General Mills, U.S. Bancorp, Target, and Best Buy. The Twin Cities rank first per capita among the 30 largest metros, and Minnesota ranks fifth overall in terms of Fortune 500 concentration per capita.
In addition, the largest private company in the country, Cargill, is headquartered in Minnesota. The global healthcare leader, Mayo Clinic, originated in Rochester, Minnesota, and continues to call the state its home. Furthermore, the global medical device giant Medtronic’s operational headquarter is located here.
Some of the Leading Employers in the Area Include:
- Mayo Clinic: 34,000+ employees
- Target Corporation: 11,000+ employees
- UnitedHealth Group: 16,000+ employees
- Wells Fargo: 8,000+ employees
- Best Buy: 5,000+ employees
Minneapolis’ robust and diverse economy offers the essential elements for achieving success — notably, Minneapolis holds the 17th position among the 384 metropolitan areas in the U.S. for having a highly diverse economy.
Moreover, Minnesota surpasses all other states in cultivating new businesses, with data indicating that startups initiated here have a higher likelihood of surpassing the five-year mark compared to anywhere else in the nation.
Vibrant Art and Culture Scene
Minneapolis is recognized as one of the world’s undisputed cultural capitals, attracting tourists worldwide. The city offers a vibrant array of fine art museums, two full-time professional orchestras, an internationally renowned opera company, and a multitude of theatrical, musical, and comedy troupes. Additionally, it holds the distinction of being the third-largest dance market in the nation.
This cultural richness fosters a thriving hospitality industry, creating opportunities for hotel and hospitality-focused CRE investments. Investing in this sector can yield significant returns from boutique hotels to trendy restaurants due to the steady influx of visitors.
Infrastructure & Transportation
The efficiency of the city’s transportation infrastructure is critical to the appeal of CRE investments. Minneapolis has an extensive freeway system, light rail lines, and an international airport that connects it to key domestic and international markets. Companies seeking convenient access to suppliers, customers, and business partners are drawn to the city, constantly needing office spaces, logistics centers, and industrial facilities.
The city’s accessibility and connectivity make it an enticing commercial location, assuring a steady demand for office spaces, logistical hubs, and industrial facilities.
Why Invest in the Midwest?
Minneapolis is one of the largest markets in the Midwest. The region has experienced steady economic growth and low unemployment rates, which provide a stable market for commercial real estate services. The cost of living and doing business is lower in the Midwest than in other parts of the country, leading to lower property prices and higher rental yields.
The Midwest’s average cost of living index is 93.6 out of 100. (Source: World Population Review)
Additionally, developers are finding it easier to acquire land in the Midwest’s secondary markets and receive the necessary permits to build in a timely manner due to lower barriers to entry compared to other regions.
In Minnesota, the Twin Cities of Minneapolis and St. Paul have been a hotbed of multifamily investment, with a high demand for rental properties and substantial capital investment.
Minneapolis’ multifamily investment market has remained strong and durable, thanks to investments made by all types of buyers, including private and institutional capital.
Takeaways
A note from Matthews™ Minneapolis Market Leader Kurt Sauer – We have a solid and stable economy. Highly educated, hardworking workforce.
Minneapolis presents compelling case for investing in CRE. Whether individuals are seasoned investors aiming to expand their portfolios or aspiring entrepreneurs searching for a strategic location, Minneapolis provides a wide range of opportunities within the CRE market. By taking advantage of the city’s potential, investors can tap into consistent cash flow, and long-term appreciation, and play a role in fostering the ongoing development of this vibrant Midwestern metropolis.
