Downtown Minneapolis Office Market

Downtown - North Loop - Mill District - Elliot Park - Loring Park
twincitizen
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Re: Downtown Office Market

Postby twincitizen » December 17th, 2014, 4:38 pm

Most likely explanation is that the folks in the executive suites all live in the western burbs

DTSB
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Re: Downtown Office Market

Postby DTSB » December 17th, 2014, 5:01 pm

nBode wrote:Can someone explain why companies would pay more to HQ in the suburbs than downtown? I genuinely just don't know.
I mean, I've been around West End and do think it's nice, but not necessarily more so than downtown..
Why do you say its cheaper to have a HQ downtown? I'm pretty sure its cheaper in the burbs, and thats why businesses go there.

MNdible
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Re: Downtown Office Market

Postby MNdible » December 17th, 2014, 5:06 pm

I think many suburban office buildings include more things in their base rent (like free parking, etc.) than their downtown counterparts. That may have something to do with the disparity.

Meanwhile, I've said it before and the newest report doesn't change a thing: 10% vacancy for Class A office space is the only number that matters. Class B doesn't really enter into it, especially since it will be very difficult to upgrade any of those existing offices to Class A.

And once you're down to 10% (depending on what's going on with the sub-lease market), you're going to have a hard time finding the large, contiguous blocks of space that even a mid-sized tenant would need. If a building has 10,000 sf available on floors 4, 9, and 15, that doesn't do anything for a tenant who's looking for 30,000 sf (and by the way, they'd like it on an upper floor with a view).

You're not going to have somebody build a tower on pure spec, but I think we're getting to the point where large users aren't going to be able to find the space that they want and will start to coalesce around one or two new buildings.

nBode
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Re: Downtown Office Market

Postby nBode » December 17th, 2014, 6:17 pm

DTSB wrote:
nBode wrote:Can someone explain why companies would pay more to HQ in the suburbs than downtown? I genuinely just don't know.
I mean, I've been around West End and do think it's nice, but not necessarily more so than downtown..
Why do you say its cheaper to have a HQ downtown? I'm pretty sure its cheaper in the burbs, and thats why businesses go there.
Based off of the article twincitizen posted earlier, some of the office parks in St. Louis Park and Bloomington are more expensive than downtown. These are what I'm wondering about.

EDIT:
This
twincitizen wrote:Office market update, and the news ain't great: http://finance-commerce.com/2014/12/loo ... ice-space/

QuietBlue
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Re: Downtown Office Market

Postby QuietBlue » December 22nd, 2014, 11:36 am

I've been around Normandale Lake a bit over the years, and it's pretty nice for a suburban office complex. I'm sure the park and lake being right next to it are part of the draw, plus there are a number of restaurants and hotels nearby. That said, I think most office space in the suburbs is going to be less expensive than in downtown.

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Munch'n
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Re: Downtown Office Market

Postby Munch'n » January 30th, 2015, 6:59 pm

Meet me in Wells

twincitizen
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Re: Downtown Office Market

Postby twincitizen » February 4th, 2015, 9:26 am

Downtown employment numbers for largest 15 employers, end of 2014: http://www.bizjournals.com/twincities/b ... ps-in.html

While Target shrunk their downtown presence by 2,500 people last year (moved to BP), employment total among the top 15 stayed pretty flat (up 1%), so I guess there's a silver lining there. USBank, HCMC, Xcel, and RBC Wealth Management added the most new downtown workers. TCF's 1,000 employees will be leaving soon, so that'll be another gap to fill. USBank is growing like crazy, and will probably keep adding jobs downtown, but they also have a sublease deal at Best Buy HQ in Richfield that can keep growing as Best Buy stagnates, shrinks, or (gasp!) goes away. USBank also has the two Meridian Towers leased in Richfield, so they are presumably pretty comfy there at 494/35W. Wells Fargo, of course, will be consolidating employees at the new Downtown East campus.

xandrex
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Re: Downtown Office Market

Postby xandrex » February 4th, 2015, 9:37 am

A bummer to see Target moving so many people out of downtown (plus people getting laid off thanks to the Canadian expansion failure), but also good to see bright spots.

US Bank is projecting a lot of growth, as noted, and I think most of it will be downtown. Yeah, they have the Best Buy HQ space, but Best Buy really has done a lot of recovery, and their last quarter blew away expectations. I think they've at least stabilized.

Another bright spot is the Star Tribune. They added a lot of employees during this last year and they've indicated that they'll continue to do so. They seem to have regained their confidence now that the combo of bankruptcy and a crappy economy have waned.

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Re: Downtown Office Market

Postby Silophant » February 4th, 2015, 9:41 am

I'm suspicious of the 63% growth listed for Xcel. I feel like I would have noticed a thousand new employees downtown over the past year.

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Re: Downtown Office Market

Postby HiawathaGuy » February 10th, 2015, 3:52 pm

Marketing firm Young America leaving namesake Minnesota town for the big city
http://www.bizjournals.com/twincities/b ... esake.html

"Young America Corp. is moving about 100 employees and its corporate headquarters to downtown Minneapolis in May, leaving Norwood Young America, the town for which it was named.

Young America leased 17,000 square feet on the seventh floor of the Lumber Exchange Building at 10 S. Fifth St., said Ken Sherman, principal of Minneapolis-based Sherman Group, which owns the building."...

Wedgeguy
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Re: Downtown Office Market

Postby Wedgeguy » February 10th, 2015, 3:57 pm

HiawathaGuy wrote:Marketing firm Young America leaving namesake Minnesota town for the big city
http://www.bizjournals.com/twincities/b ... esake.html

"Young America Corp. is moving about 100 employees and its corporate headquarters to downtown Minneapolis in May, leaving Norwood Young America, the town for which it was named.

Young America leased 17,000 square feet on the seventh floor of the Lumber Exchange Building at 10 S. Fifth St., said Ken Sherman, principal of Minneapolis-based Sherman Group, which owns the building."...
Great to see another tenant going into this landmark. Hopefully this will help to encourage more updating to the building.

mattaudio
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Re: Downtown Office Market

Postby mattaudio » February 11th, 2015, 1:07 pm

The article makes it quite clear that the move DT is, in large part, due to the need to recruit talent in the technology and digital marketing areas.

grant1simons2
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Re: Downtown Office Market

Postby grant1simons2 » March 2nd, 2015, 3:03 pm

Avison Young, a Canadian based real estate brokerage, opens an office in the Accenture building:

http://www.avisonyoung.com/fileDownload ... 5Final.pdf

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

HuskyGrad
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Re: Downtown Office Market

Postby HuskyGrad » March 2nd, 2015, 3:44 pm

With the acquisition of URS by engineering firm AECOM the two companies will be consolidating their 200-300 person combined workforce sometime this summer. URS is currently in Fifth Street Towers and AECOM is in LaSalle Plaza.

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Re: Downtown Office Market

Postby MNdible » March 2nd, 2015, 3:51 pm

How that acquisition didn't raise a bunch of anti-trust red flags is totally beyond me.

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bapster2006
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Re: Downtown Office Market

Postby bapster2006 » March 2nd, 2015, 5:49 pm

Why the Twin Cities is an attractive office market on a national scale:

http://m.bizjournals.com/twincities/blo ... -next.html

mplsjaromir
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Re: Downtown Office Market

Postby mplsjaromir » March 3rd, 2015, 8:35 am

^^^ That is an advertisement.

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bapster2006
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Re: Downtown Office Market

Postby bapster2006 » March 3rd, 2015, 8:50 am

Yea, hopefully it works.

acs
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Re: Downtown Office Market

Postby acs » March 3rd, 2015, 3:34 pm

So for those of you hoping for Target to save the day and help the growth of Minneapolis, maybe even build a new tower at some point, this is happening:

http://www.startribune.com/business/294837161.html

For those without a subscription, Target is cutting several thousand positions over the next two years, primarily at headquarters, to try and achieve $2b in cost saving while investing in tech and stock buybacks.

One analyst even said this:

"That popping sound you hear is the downtown Minneapolis bubble."

and

"Wonder if any downtown Minneapolis apartment builders are rethinking things w/Target's big job cuts? strib.mn/1vZiUtY"

grant1simons2
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Re: Downtown Office Market

Postby grant1simons2 » March 3rd, 2015, 3:39 pm

Ugh. Our world doesn't revolve around Target. Many of the people I know who are living downtown don't even work for Target. A lot are going there to work for smaller businesses or start ups or law firms even. I am ANALYZING that this won't really affect much of the downtown cycle. Then again, I'm just an optimist who says what I see.

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


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