Top 10 Office Buildings With Highest Vacancies in the Twin Cities
- Oct 29, 2018
The Minneapolis–Saint Paul metro continues to be a tenant’s market due to affordable office rental rates and an emerging start-up scene. Landlords are renovating existing inventory in order to attract tenants, which continue to focus on modern amenities and open space. Developers, especially in downtown Minneapolis, are opting to convert buildings with an industrial past.
As of July 2018, average vacancy in the Twin Cities was 12.6 percent and more than 9.5 million square feet of office space was listed. Large employers and well-established tenants such as TCF Financial Corp., Northeast Bank or OptumHealth vacated entire buildings and campuses, relocating closer to the urban core. Office vacancy is expected to climb especially in downtown Minneapolis, as more than 650,000 square feet of premier office space is expected to come online by year’s end. Yardi Matrix lined up the office buildings with the highest vacancies in the metro as of September 2018.
10. Rosedale Corporate Plaza – Building C, Roseville, Minn.
The 76,300-square-foot property is part of Rosedale Corporate Plaza, a five-building office campus in Roseville, Minn. Essjay Investments acquired Buildings A, B and C in March 2017 and, while the first two are largely occupied by tenants from the health-care sector, Building C has a 64,601-square-foot vacancy. Completed in 1986 and sited at 2665 Long Lake Road, the four-story asset has availabilities ranging between 6,540 and 23,766 square feet. Data analytics company FICO, a tenant since 2012, occupies a little over 11,000 square feet at the property.
9. The [email protected], Minneapolis
Franklin Steet Properties, which sold a Kansas City, Mo., office tower last July, owns and manages the historic 125,099-square-foot office building. The [email protected] comprises 108,935 square feet of vacant space. Completed in 1931, it formerly housed TCF Financial Corp., which in 2016 relocated more than 1,000 workers from Minneapolis to Plymouth, Minn. According to Yardi Matrix, the landlord renovated the asset in 2017, which resulted in open floorplans, upgraded amenities, new building systems, a five-story atrium which connects the building to the adjacent 17-story TCF Tower and a shared 215-stall parking ramp. Located at 801 S. Marquette Ave. in the Commercial Business District of Minneapolis, the pedestrian-friendly building sits in the immediate vicinity of retailers, hotels, eateries and mass-transit options.
8. Globe University Woodbury Campus, Woodbury, Minn.
Globe University’s office campus in Woodbury, Minn., is largely vacant since 2016, when the state of Minnesota stopped the for-profit university from operating in the state. The first building, located at 8089 Globe Drive, was built in 2006. It encompasses 68,581 square feet across three stories and sits completely vacant. The other asset has a total of 25,871 square feet and a 14,053-square-foot availability, with Woodbury Spine Wellness Center leasing the rest of the space.
7. 700 N. 5th St., Minneapolis
Schafer Richardson, best known for its apartment and condo developments, converted the former industrial site into a 56,000-square-foot office building in April 2018. The single-story, Class A asset was originally completed in 1910 and previously served as a Weather-Rite warehouse. Following the redevelopment, it features new building infrastructure, locker rooms, bike storage and 250 on-site surface parking spots.
6. Commerce Building, Bloomington, Minn.
The Recruit Masters-owned office building encapsulates 50,475 square feet of leasable space, or three stories of 16,825 square feet each. The company purchased the distressed property in 1993 from the now-defunct Norwest Bank. Amenities include flexible floorplates, storage space, on-site management and conference space. Commerce Building is located at 8200 Humboldt Ave. S., near the intersection of interstates 35W and 494, which is currently undergoing a $400 million renovation.
5. Northeast Business Center, Columbia Heights, Minn.
Another office building purchased in a distressed sale, Swervo Development’s Northeast Business Center has a 94,129-square-foot, full-building vacancy. The six-story asset was erected in 1979 and underwent a $1.5 million renovation plan in 2008. Additionally, it features a 10,000-square-foot open-air plaza. After it had occupied the asset since its completion, Northeast Bank vacated the building in 2015. Situated at 3989 Central Ave. NE, the property is a 15-minute drive from downtown Minneapolis.
4. 2800 N. Wayzata Blvd., Minneapolis
The 101,359-square-foot building has been vacant since telecommunications company CenturyLink sold it last year to an entity affiliated with Nedal Abdul, president of Swervo Development. Northwestern Bell built the three-story property on 9 acres in 1956 along the north side of the Interstate 394 corridor. The company officially became Qwest in 2000 and ten years later, it merged with the building’s last tenant, CenturyLink. Redevelopment plans call for renovations, as well as affordable and senior housing units on each side of the property.
3. Midway Corporate I, St. Paul
CSM Corp. developed the two-building Midway Corporate office campus in 2005 and 2007. The 107,344-square-foot Midway Corporate I was formerly leased to Intel, which vacated the premises this summer and is working on a $7 billion project in Phoenix. The building features high ceilings and large floor plates and is connected to Midway Corporate I through an enclosed walkway. Situated at 2340 Energy Park Drive, the asset offers easy access to mass transit options, Highway 280, Interstate 94 and St. Paul International Airport.
2. Shoreview Corporate Center – 1050 & 1080 County Road F West, Shoreview, Minn.
Shoreview Corporate Center, a 533,000-square-foot suburban office and industrial campus, changed hands in 2011, when Eagle Ridge Partners acquired it through a foreclosure sale from U.S. Bank. Two of its buildings are located at 1050 & 1080 County Road F W. and total 189,338 square feet. The site used to house Deluxe Corp.’s headquarters.
1. Golden Valley Business Center, Golden Valley, Minn.
UnitedHealth Group’s 340,258-square-foot office building is one of the many assets sitting vacant at the intersection of Highway 55 and Douglas Drive in Golden Valley, Minn. OptumHealth left the premises in 2016 and Golden Valley Business Center has been vacant ever since. The two-story building was completed in 1985 and underwent renovations in 2005. Located at 6300 Olson Memorial Highway, it sits adjacent to the Golden Valley Country Club, schools, banks, parks and communities.
Images courtesy of Yardi Matrix