Downtown Minneapolis Office Market

[John]

^^^So far the square footage office space mentioned for the Opus or TCF block would unlikely produce a supertall, however maybe something in the 40 story range is possible. Hines is interested in the Marquette and 9th parking lot site but so far not even a tentative proposal from them. One interesting thing mentioned in the article was the aging office space downtown even in the Class A market. There may be a desire by some tenant ( or tenants ) out there who want something new and contemporary in office space design. That may play in as a factor something gets built versus vacancy rates etc.

[acs]

^ Or they will just expand at their current suburban campuses.

[Minneboy]

Or it could include some residential and a new hotel aka a Red along with office component and then we'd be seeing something substantial. It's at least what I keep hoping for.

[John]

Or it could include some residential and a new hotel aka a Red along with office component and then we'd be seeing something substantial. It's at least what I keep hoping for.

Also including retail. Hopefully all of this will happen in some configuration for the Opus/Ritz block project on Nicollet Mall. This project should really have punch if the Mall is going to be the "main street" of the city once again.

[MinnMonkey]

What I don't understand is that it seems like almost every coastal city and/or major city in this country is expanding office space in their downtowns, yet Minneapolis and the Twin Cities support one of the highest concentration of large companies and don't have much of any activity going on.

Not that I don't believe you, but most of the other cities I have visited in the past few years, including coastal cities, I haven't seen much commercial developments in their downtowns either.

[contrast]

I think USBank is a real possibility. They have been quietly and constantly growing through smaller acquisitions. I think it is their time to anchor something new. Also, they may wish to counter balance all the positive press WF is getting with their downtown east development.

[min-chi-cbus]

What I don't understand is that it seems like almost every coastal city and/or major city in this country is expanding office space in their downtowns, yet Minneapolis and the Twin Cities support one of the highest concentration of large companies and don't have much of any activity going on.

Not that I don't believe you, but most of the other cities I have visited in the past few years, including coastal cities, I haven't seen much commercial developments in their downtowns either.

Seattle, Philly and SF come to mind immediately. However, in all three instances there is a major corporate tenant bolstering development (Amazon, Comcast, and Salesforce, respectively). There are also, however, many spec office projects going up in those cities, and several others. THAT's what I'm not getting.

Also, Salesforce has total revenues of "only" $4B, yet it's building San Francisco's next tallest building -- what?!

http://techcrunch.com/2014/04/11/salesf ... rce-tower/

[min-chi-cbus]

I think USBank is a real possibility. They have been quietly and constantly growing through smaller acquisitions. I think it is their time to anchor something new. Also, they may wish to counter balance all the positive press WF is getting with their downtown east development.

If only it was as simple as "anything you can do I can do better"!

However, if they were to merge with or acquire one of the next five largest US Banks (HSBC, PNC, Capital One, etc.) THEN I can totally see a shiny new HQ happening. In that scenario though, I would not want to lose US Bank's HQ status in MN, like Norwest Bank's acquisition of Wells Fargo.

[twincitizen]

I overheard this morning that Best Buy HQ has 200,000 sf available. US Bank is already leasing some space there. In the short term, they will probably expand there and in their current downtown locations. There was an announcement not long ago that they were shifting some employees from 800 Nicollet (US Bancorp Center) to 200 South 6th (US Bank Plaza) because of lower rents at the latter. US Bancorp does not own 800 Nicollet. They bought the plaza in 2009 (former Pillsbury Center)

http://www.bizjournals.com/twincities/b ... plaza.html

[go4guy]

So the talk about needing an anchor for a new tower. How much square footage is required? Look at Be The Match. A "company" that I would never think about, but they needed 240k sq ft. Isnt that enough to be an anchor in a 500k sq ft tower? It doesnt seem that crazy that a similar sized company may want new space.

[EOst]

But why? WIth the amount of vacant office space downtown, it wouldn't take a lot of shuffling to open up some big areas for businesses who wanted to be downtown. Why build a new tower right now (especially a tall one) except for vanity?

[Minneboy]

But why? WIth the amount of vacant office space downtown, it wouldn't take a lot of shuffling to open up some big areas for businesses who wanted to be downtown. Why build a new tower right now (especially a tall one) except for vanity?

I thought I read it has to do with new buildings having the best and newest technology, including being energy efficient.

[grant1simons2]

LEED?

[mamundsen]

So the talk about needing an anchor for a new tower. How much square footage is required? Look at Be The Match. A "company" that I would never think about, but they needed 240k sq ft. Isnt that enough to be an anchor in a 500k sq ft tower? It doesnt seem that crazy that a similar sized company may want new space.

On this note... Did you know that IDS does not have an anchor tenant? My sister-in-law works for the company that manages it. She says it's a lot of small sq ft office spaces. Totally unlike City Center, where she managed previously.

So... A large office tower can work without an ancho tenant.

[MS3]

If you build it.. They will come. It's been the formula since the 1700s. If you build it original and creative.. Even more will come.

[FISHMANPET]

But it was built with an anchor tenant, Investors Diversified Services, Inc. So the leasing end can work if it already exists (and is a signature building, I bet the Multi Foods tower doesn't do as well) but it probably needs an anchor to be built. We're not at a point where an investor can build an office building on spec and hope it fills up, they need to have an idea that they've got a big tenant from the start to prove that the building will make some money.

[David Greene]

Or it could include some residential and a new hotel aka a Red along with office component and then we'd be seeing something substantial. It's at least what I keep hoping for.

Arcology!

[Nathan]

But why? WIth the amount of vacant office space downtown, it wouldn't take a lot of shuffling to open up some big areas for businesses who wanted to be downtown. Why build a new tower right now (especially a tall one) except for vanity?

yes I'm sure plenty of companies want to go through the expense of moving just so another company can have some continuous office space...

[IllogicalJake]

But why? WIth the amount of vacant office space downtown, it wouldn't take a lot of shuffling to open up some big areas for businesses who wanted to be downtown. Why build a new tower right now (especially a tall one) except for vanity?

yes I'm sure plenty of companies want to go through the expense of moving just so another company can have some continuous office space...

It's not about want, it's about money. It's much cheaper to pay these companies to move than it is to build a new tower.

[go4guy]

True. But the people who would pay these companies to move would not be the ones building the towers. Those REITs are not developers. And the companies themselves needing the large space are not going to pay for other companies to move for them. They pay roughly the same rent either way.