Downtown Minneapolis Office Market

[VacantLuxuries]

Yes, because everyone knows that the Minneapolis economy completely revolves around Target.

Though by headquarters, do they mean just downtown or from the massive hulk by 610 as well?

[Rich]

According to MPR “Target Corp. plans to eliminate several thousand positions, primarily at its Minneapolis headquarters”

http://www.mprnews.org/story/2015/03/03/target-layoffs

[Silophant]

Hopefully primarily the hulk by 610. Its brand new, sell it off to someone else.

Rolling my eyes at those quotes. This is bad news, to be sure, but there's, what, 140k jobs downtown? Target is only ~7% of that, and they're downsizing, not pulling out completely. He's acting like Mayo just announced they were leaving Rochester.

[grant1simons2]

Here's the release by Target if anyone was curious

http://pressroom.target.com/news/target ... m-business

Cost savings of $2 billion over the next two years will fuel Target’s growth and drive profitability. These savings will be realized through operations, technology and process improvements; supply chain and sourcing efficiencies; and corporate restructuring. The restructuring will be concentrated at Target’s headquarters locations and focus on driving leaner, more efficient capabilities, removing complexity and allowing the organization to move with greater speed and agility. This includes the establishment of centralized teams based on specialized expertise and the elimination of several thousand positions over the next two years. This year, Target expects to invest between $2 and $2.2 billion in capital expenditures, including a $1 billion investment in technology and supply chain.

[twincitizen]

I thought Target gave up on building a new tower after the debacle with Lisa Goodman and the NIMBY squad.

I think the folk(s) at SSC with weird anti-Minneapolis political grudges may have muddled the truth on what really happened (particularly the individual who likes to say "Silly Hall"). Target has a long lease at City Center. They aren't going anywhere, nor building anything, for a while.

As for downtown, the loss of a thousand-ish Targeteers obviously hurts, but in real terms, how many actually live in the downtown core anyways?

Downtown job growth has been frustratingly stagnant coming out of the recession, but I think it's clear that the housing growth is really driven by a multi-faceted demographic shift and changing lifestyle preferences. Young people (regardless of where they work) want to live downtown, and now retirees want to live downtown too because it's safer and more appealing than ever before. I think we will see continued strong demand for downtown living as existing downtown employees retire (i.e. boomer suburbanites) and are replaced by younger people choosing to live downtown, at least until they have kids Besides the whole boomer-millennial spectrum, the truth is that more people are living alone than ever before in history. Additionally, people are putting off home-buying and child-rearing until later in life than ever before in history. This pair of demographic trends are absolutely huge, and they seem to get lost in any article about "millennials" and "preferences". This demographic sea change ensures that there will be continued construction of apartments for quite some time, as long as the overall population is growing.

[acs]

I know you guys are optimists, which I appreciate, but this pretty much puts the nail in the coffin for a Target expansion downtown on top of what Lisa Goodman did. If they ever go back into hiring mode every indication right now is it will be out in the boonies of Brooklyn park.

Why is that important? Because despite what the hardcore urbanists on this board will tell you nobody wants to live in a 500 square foot box for 1500 a month when they still have to commute an hour to work. The idea that people will choose to live downtown if they don't work there is laughable. That's why everybody here and at SSC loves to dream about supertall office buildings, because at the end of the day those buildings mean jobs, jobs, and jobs. Not just retail and service jobs, but white-collar jobs that actually pay enough to allow people to live downtown and thus add all those other qualities urbanists like.

Sadly, Minneapolis has done an abysmal job at both attracting new companies from the suburbs and retaining the ones we have. Despite the national trend of young population growth pulling jobs back to city centers and outpacing the suburbs since the recession, Minneapolis job growth not only lags our suburbs but is declining.

http://www.citylab.com/work/2015/02/you ... rs/385934/

Oh, and Target's lease in city center is up in 2018, so not that long term.

[grant1simons2]

Is that why the vacancy rate is so low and continues to fall?

[Nick]

The office buildings create the jobs?

[xandrex]

Not great news to hear about this Target stuff. I've heard from some folks that while a lot of people will be laid off, they'll also be doing much more hiring on the digital side.

I know some people are poo-pooing Target leaving, but they're no small part of the downtown population and the culture of downtown. I mean if you work downtown, even on the DTE side like I do, there was a perceptible difference when Target dropped their dress code. Seven percent of downtown worker is no drop in the bucket.

I think there's another thing people are forgetting too - Target is a host with a lot of contractors feeding off of it. Some are required to be near headquarters offices, others don't but like to be. This is going to hit them hard too. It's not just the thousands inside the company that will lose their jobs - it's the others who rely on Target too.

[twincitizen]

Oh, and Target's lease in city center is up in 2018, so not that long term.

Sorry, but you're wrong: http://www.startribune.com/business/42761172.html

"The new lease term will extend through December 2023, with renewal extensions through 2038."

despite what the hardcore urbanists on this board will tell you nobody wants to live in a 500 square foot box for 1500 a month when they still have to commute an hour to work. The idea that people will choose to live downtown if they don't work there is laughable.

This is borderline trolling and I should know better than to respond, but

Let's revise your hyperbole with a dash of realism:
650-700 square feet (for $1500/month)
Commute 30 minutes to work (Target North is just 15 miles away.) There are TONS of jobs out 394 that are even closer. The U of M ain't far away either (I hear doctors and professors get paid quite handsomely)

Yes, in fact, thousands of people live downtown today and drive to work in the suburbs. Why do you think apartment buildings and condos downtown have so many ****ing parking spaces? If everyone walked to work downtown, this would not be the case. What a bizarre stance that no one lives downtown unless they work there.

[grant1simons2]

People do know that the result of these cuts is for Target to push on more focus to City Targets and Target Express?

[xandrex]

Target is indeed pushing more of the smaller-format stores, but that has nothing to do with these cuts. These are corporate jobs - analysts, accountants, marketing. The types needed regardless of format. They're looking at eliminating a quarter or more of jobs from what some insiders have been whispering about. It's no small matter.

[MNdible]

I thought Target gave up on building a new tower after the debacle with Lisa Goodman and the NIMBY squad.

Yes, I'd agree that Nasa and a few others loved to grind this particular axe, and they stretched the truth and presented only one side of the story on that topic.

Obviously, Target's stumbles over the last year have changed things significantly, but I do know that until quite recently, they were very much interested in building a new tower.

[Silophant]

despite what the hardcore urbanists on this board will tell you nobody wants to live in a 500 square foot box for 1500 a month when they still have to commute an hour to work. The idea that people will choose to live downtown if they don't work there is laughable.

Anecdata: I know at least three people that graduated from the U with me doing exactly that.

[minntransplant]

I think we will see job gains in other areas at Target, negating most of these cuts. I doubt there will be a net job loss for target hq in 2-4 years.

Also, talking with friends that work at target,this overhaul is long overdue. Short term this sucks, but it's for the best.

[John]

It would be interesting to see the data about the number of office workers in The North Loop. I'm sure that has increased this year and will continue to do so. I think a large part of the future growth in workers downtown will be from smaller but growing companies. That's healthy. As far as the Target cuts, that's mostly related to their Canadian fiasco and they should have known better to invest in opening so many stores without understanding the market. Lesson learned and after they restructure and regroup, they will probably grow again.

[acs]

Here's the best I found on the employment numbers:

http://www.bizjournals.com/twincities/b ... ps-in.html

By the end of this it could mean that Target is no longer the largest employer downtown. I guess the best we can hope for is that they relocate everyone from BP to Minneapolis, but from what the article is saying they have been moving ~2,000 employees the other way over the past year while this same CEO was in charge. I think this chart also shows how most of the employment downtown is made up of smaller companies of under 1,000 employees, and how Target absolutely dwarfs them in downtown presence. For instance, a 3k cut in jobs from target is like losing all the jobs of the star tribune, the Fed reserve, and Thrivent Financial.

[acs]

despite what the hardcore urbanists on this board will tell you nobody wants to live in a 500 square foot box for 1500 a month when they still have to commute an hour to work. The idea that people will choose to live downtown if they don't work there is laughable.

Anecdata: I know at least three people that graduated from the U with me doing exactly that.

That's weird when you initially think about it, but then I looked at the numbers. Minneapolis has a population of nearly 400,000 but at last estimate only 305,000 jobs. Which means that, by some definitions... Minneapolis is a suburb

[VAStationDude]

http://en.wikipedia.org/wiki/Labor_forc ... ted_States

[mnmike]

I really don't know where it came from that "Target hates the city" because they wouldn't "let" them built a whole 6 floors taller. I worked downtown, right across the street during this whole alleged drama....and it really wasn't that big of a drama. They ended up with about the same amount of space, configured differently, after a relatively short proposal/design process and did receive some tax incentives. That whole part story is really overplayed...drives me nuts. It really seems like it was a few people from this site and others that kind of created this myth that Target now hates the city due to this alleged drama over a few floors in height.

PS, management has pretty much entirely turned over twice since then...so if anyone was holding some kind of grudge...I doubt anyone is anymore.

Aaaanyway....bad news about the layoffs any way you look at it. Hopefully in the end, their total downtown footprint doesn't shrink too much. I think the company will be just fine.