Twin Cities office tower values plunge, shifting tax burden to homeowners
Office tower assessments in the Twin Cities have plunged, with downtown Minneapolis towers down more than 20%, Minneapolis commercial values dropping about 9% (from $8.6 billion to $7.8 billion) largely because of office write‑downs, and St. Paul’s seven largest office properties seeing 2026 declines of 12%–29%. City officials and assessors say the erosion in large commercial values will likely push a greater share of the property‑tax levy onto homeowners in both Minneapolis and St. Paul.
📌 Key Facts
- Across Minneapolis, the total estimated market value of commercial property fell from $8.6 billion to $7.8 billion — about a 9% decline.
- The bulk of that citywide decline is attributed to falling values in downtown office buildings, incorporating earlier tower-specific write-downs into the commercial total.
- Major downtown Minneapolis office towers have seen assessment declines of more than 20%.
- In St. Paul, the seven largest office properties recorded 2026 assessed-value declines ranging from 12% to 29%, including one property down 29%.
- The St. Paul office-value drops mirror the large assessment declines reported for downtown Minneapolis towers, signaling a regional weakening in large-office valuations.
- City officials and assessors say continued erosion in large-office values will likely push a greater share of the property-tax levy onto homeowners in both Minneapolis and St. Paul.
📊 Relevant Data
The overall office vacancy rate in Minneapolis rose to 27.9% in Q4 2025, up from 28.6% a year earlier but still indicating significant underutilization of office space.
Minneapolis MarketBeats | US — Cushman & Wakefield
Twin Cities office vacancies remained high at 22.1% in Q3 2025, with Class B buildings and downtown cores continuing to struggle due to persistent remote work trends.
Twin Cities office vacancy holds steady at 22% — Finance & Commerce
In downtown Minneapolis, office vacancies remain about 30%, well above the metro average ranging from 17% to 22%, contributing to declining property values.
Many Twin Cities offices are sitting empty. Rents are rising anyway. — Star Tribune
In 2025, over 32.6 million Americans worked remotely, representing 22% of the workforce, with hybrid work becoming the preferred model and contributing to higher office vacancy rates.
Nearly 80% of employees whose jobs can be done remotely were working either hybrid (52%) or fully remote (26%) as of early 2025, leading to reduced demand for office space and subsequent value declines.
53+ Remote Work Statistics and Trends for 2026 — Vena Solutions
📰 Source Timeline (3)
Follow how coverage of this story developed over time
- The seven largest office properties in St. Paul have seen 2026 assessed‑value declines ranging from 12% to 29%.
- These St. Paul office‑value drops mirror the earlier‑reported 20%+ assessment declines for major downtown Minneapolis office towers.
- City officials and assessors acknowledge that continued erosion in large‑office values will likely push a greater share of the property‑tax levy onto homeowners, not just in Minneapolis but now in St. Paul as well.
- Confirms that across Minneapolis, the total estimated market value of commercial property has fallen from $8.6 billion to $7.8 billion, about a 9% drop.
- Attributes the bulk of that decline to falling values in downtown office buildings, tying earlier tower‑specific write‑downs into a citywide commercial total.
- Links the decline explicitly to the fact that homeowners will shoulder a greater share of the city’s property‑tax levy as commercial value erodes.