min-T3Rendering Minneapolis’ new T3 building, the largest wood building built in this century. Amazon has agreed to occupy about 80K square feet.

MINNEAPOLIS—Tech has assumed tremendous importance in many of the nation’s office markets. But few metro areas are as tech-friendly as the Twin Cities. According to a new report from CBRE Research, the Minneapolis/St. Paul region leads all Midwest markets in the concentration of tech industries, followed by Columbus, Kansas City and Chicago.

And the Twin Cities’ active tech market has made a significant impact on office leasing so far in 2017. Technology industries accounted for 18.7% of the 1.1 million square feet of leases signed during the first quarter, compared to only 6.5% in last year’s first quarter.

“There has been a lot of venture capital coming in, both from the Midwest and the coasts,” Kevin Anderson, senior associate in CBRE’s Minneapolis office, tells GlobeSt.com. As a result, tech firms “have gone on a hiring spree” and need to expand footprints. At the same time, professional service firms have begun “downsizing due to new workplace trends like lower square footages per employee.”

National firms have also started to establish branches or regional headquarters in the Twin Cities. Amazon, for example, recently opened an 80,000 square foot office in Michael Green’s new T3 building in Minneapolis’ North Loop neighborhood. The 225,000 square foot T3 was the Twin Cities’ first spec office project in 12 years. It is also ”Wired Certified,” an international standard developed by New York-based WiredScore that distinguishes best-in-class Internet connectivity.

Billed as the largest wood building constructed in this century, T3 epitomizes many of the changes in the modern office market. More firms, especially in the tech world, aim to attract employees by providing comfortable brick-and-timber surroundings. Furthermore, most millennials prefer “cool” neighborhoods, such as North Loop or Chicago’s Fulton Market, that were formerly dedicated to warehouse and industrial uses. And today, North Loop is both an office hub and a real neighborhood that provides many living options.

Tech is also supplying the fuel for several other projects. United Properties, for example, wants to break ground this fall on Nordic House, a ten-story building at 729 Washington Ave. in North Loop. The developer has already secured a commitment from Ovative/group, a Minneapolis-based digital marketing firm, to occupy a significant portion of its 195,000 square feet.

Currently, the region’s tech boom is mostly in Minneapolis’ CBD and North Loop, Anderson says. But St. Paul does have the software firm GovDelivery LLC. And its former chief executive officer Scott Burns just purchased the former Ecolab building in downtown St. Paul, and Anderson believes he may recruit more tech firms to its CBD. In addition, both Minneapolis and St. Paul are relatively small cities, and each has attractive suburbs that can be reached in as little as 15 minutes. “I think we’ll soon see some tech firms sprouting out there.”