Downtown Minneapolis Office Market

[twincitizen]

Biz Journal really taking Target to task over their RTO policy. Glad it's getting coverage.

How Target's flexible work policy compares to competitors Amazon and Walmart
https://www.bizjournals.com/twincities/ ... rison.html

They had an article a few weeks prior that similarly criticized Target's lack of RTO mandate, full of quotes from restaurateurs and housing developers. ARE YOU THERE, TARGET? https://www.bizjournals.com/twincities/ ... -mpls.html (locked article)

At the end of the article, the author found someone that laid into CEO Brian Cornell:

Regardless, the company isn't in the position to enforce a sweeping in-office mandate, Saliterman said, when its CEO and other executives live elsewhere. He thinks everything at Target would be different if it was led by a local CEO with loyalty to Minneapolis. It's unclear how much time Cornell, who's two years from retirement, and the rest of the C-suite actually spend in Minneapolis. Target declined to comment. However, the resounding word on the street is that Cornell's primary residence is Siesta Key, Fla., where he and wife Martha own a house.

Fitzgerald said: "He clearly doesn't have any desire to return to the office in Minneapolis, and therefore isn't pushing his employees to. But can you blame him? If I was on the beach in Siesta Key, I don't know that I would be caring too much about the big vacant hole that I’ve left in downtown Minneapolis either.”

https://www.axios.com/local/twin-cities ... eld-office
The Axios Twin Cities newsletter today had some info on US Bank's lease renewals. It sounds like they are likely going to renew their entire 444,000-square-foot lease at US Bancorp Center / 800 Nicollet. That's surprising considering that they own US Bank Plaza. But similar to Wells Fargo's recent moves, they'll end/reduce office leases elsewhere and concentrate workers downtown. They'll cut their lease in half at Richfield's Meridian Crossing (35W & 494) and potentially leave downtown St. Paul entirely (U.S. Bank Center will have to get a new name).

[VacantLuxuries]

I feel for the Nicollet Ave restaurants, but I'm glad it sounds like things are improving even if they aren't to the level they'd prefer.

Still hoping Target holds out long enough to starve some of the skyway retail out of oxygen so they either come down to street level or give up and the retail space is reconfigured for a future version of Minneapolis without the dead mall vibes. There's no long term benefit to downtown to have all the retail demand clogged up with businesses open 4-6 hours a day, five days a week.

[Silophant]

U.S. Bank is renewing its entire 440ksf lease at 800 Nicollet for ten more years, but leaving their space in Richfield and consolidating those employees to Hopkins and downtown.

[StandishGuy]

This Wall Street Journal article features Downtown Minneapolis and highlights the high office vacancy rate and conversion of some buildings to housing: https://www.wsj.com/real-estate/commerc ... es-d0e3391

IMO the lack of significant retail options in the CBD has really diminished some of the cache and fun of working downtown. Back when I moved to town in the early 1990s, there were four major department stores (Daytons, Carsons, Saks 5th Avenue and Neiman Marcus) amongst many other mall chains all up and down Nicollet Mall. Now, there's just Target and Walgreens remaining. Now it seems that any interesting local or national retailers that do exist are located in the North loop far from the office towers. There was something fun about checking out a sale at Daytons/ Marshall Fields/ Macy's on your lunch hour. Yeah, I get that brick and mortar stores are struggling, but most large downtowns still have a lot more national retail in their CBD despite having a smaller residential population than downtown Minneapolis.

[AccordGuy]

This Wall Street Journal article features Downtown Minneapolis and highlights the high office vacancy rate and conversion of some buildings to housing: https://www.wsj.com/real-estate/commerc ... es-d0e3391

IMO the lack of significant retail options in the CBD has really diminished some of the cache and fun of working downtown. Back when I moved to town in the early 1990s, there were four major department stores (Daytons, Carsons, Saks 5th Avenue and Neiman Marcus) amongst many other mall chains all up and down Nicollet Mall. Now, there's just Target and Walgreens remaining. Now it seems that any interesting local or national retailers that do exist are located in the North loop far from the office towers. There was something fun about checking out a sale at Daytons/ Marshall Fields/ Macy's on your lunch hour. Yeah, I get that brick and mortar stores are struggling, but most large downtowns still have a lot more national retail in their CBD despite having a smaller residential population than downtown Minneapolis.

You wrote exactly what I have been thinking for the past couple of years. I go downtown five days a week because my commute is short and I detest working from home. As I walk around the skyway it makes me sad to think of all the places I used to be able to go for lunch, or to shop while on my lunch break. The downtown core is not an interesting, dynamic place to be anymore. It's sad, and I don't see anything changing for the better.

[mattaudio]

This Wall Street Journal article features Downtown Minneapolis and highlights the high office vacancy rate and conversion of some buildings to housing: https://www.wsj.com/real-estate/commerc ... es-d0e3391

archive without paywall
https://archive.ph/bTdX0#selection-2293.0-2303.184

[mullen]

i read Target CEO Cornell has purchased a place in Wayzata. he's 65 i wonder how long he remains heading the company. Target needs a leader with ties to minnesota.

[TroyGBiv]

https://www.washingtonpost.com/business ... n-cornell/#

Target changed their mandatory retirement age to keep Cornell in for more years.

[Silophant]

Target is planning to have the HQ workers come in for one week per quarter in 2024.

lol

[Mdcastle]

Target can't be left out in wasting workers time and money and increasing carbon emissions.

[Tyler]

lol you dont give a shit about carbon emmisions

[mattaudio]

If anything the "one week per quarter" thing gives me the impression they ***don't intend*** to have people come back on a regular, consistent basis (which is fine IMO).

My company is remote-first, and we generally do the same thing for on-sites/strategy sessions. 1-2x per year for the entire company, and 2-4x per year as a team whenever we feel the need. People fly in, stay at the same hotel, make a week of it. Sure beats having to go in somewhere 2-3x per week every week.

[Tyler]

https://www.axios.com/local/twin-cities ... ameriprise

Hadn't really thought of this, but as its laid out it makes sense, unfortunately.

That said it wouldn't be a massive loss, but id rather they implode the sleep number HQ (which just might be one the table when that lease is up). This area would be better served with more residential/ mixed use. Highly doubt much short and mid-term demand for office here.

[daveybabymsp]

https://www.axios.com/local/twin-cities ... ameriprise

Hadn't really thought of this, but as its laid out it makes sense, unfortunately.

That said it wouldn't be a massive loss, but id rather they implode the sleep number HQ (which just might be one the table when that lease is up). This area would be better served with more residential/ mixed use. Highly doubt much short and mid-term demand for office here.

I hope the state legislature can pass a land value tax district bill and we can tax downtown properties based on land value. Current incentives could make it a smart choice to demolish an empty office tower and replace it with a parking lot just to avoid the property tax. I’m fine with demolishing empty office space but it should be replaced with a better use.


Sent from my iPhone using Tapatalk

[Silophant]

New surface parking lots are still banned downtown, as far as I'm aware. Not that that's stopped people from demolishing buildings and leaving them as grassy lots for a decade or two in the past.

[mister.shoes]

Gawd I hate the Axios "style".

[mattaudio]

The style:

Tradition tell us lists are made of:

• List items
• But we use them for sentences or even paragraphs

Why it matters: The more we break with convention, the more we're perceived to be a unique value-add in the content chain.

Zoom in: But at least we don't call ourselves "MSP BJ"...

Please sign up for our email newsletter.

Yes, but...

No, seriously, please sign up for the newsletter.

[twincitizen]

Anything going on with 20 Washington? Voya vacated the building, consolidating their offices in 250 Marquette. The website for Washington Square no longer includes 20 Washington, now marketing it as a two-building campus consisting of 100 and 111 Washington. I found a fairly recent leasing brochure for Washington Square that included all 3 buildings, so 20 Washington being excluded is a change. At the moment it's still owned by Shorenstein along with the other two buildings. Various commercial leasing websites list it as vacant. The assessed value dropped from $17mm to $10mm for taxes payable 2025.

Washington Square website not mentioning 20 Washington: https://www.washingtonsquare-mn.com/

I don't know if it's even feasible, but that would be a very interesting high-end condo conversion to say the least. The building looks to be about 120' wide, almost twice the width of a typical multifamily building, so that's why I'd assume large condos over apartments. The easy explanation could be that Shorenstein is looking for another tenant to occupy the whole building, but if that were the case, why would they no longer market it as part of Washington Square?

[MNdible]

Do we know if the building has HPC protection yet? The exterior, with its gorgeous bookmatched marble panels, really doesn't have much in the way of windows and we probably don't want it to be messed with. I'm not sure if carving a lightwell into the building interior would help matters.

I'd agree that the best solution is to find a unicorn corporate tenant who would take over the whole building and make it their cool modernist clubhouse. But it's sneaky big -- about 150k sf above grade.