JONES LANG LASALLE | O F F I C E H I G H L I G H T S

Minneapolis

Mike Stetz +1 763 567 2006

Ned Tarbox +1 763 567 2004

Office rental growth in the Minneapolis/St. Paul market is approximately three to four percent a year, but is expected to pick up slightly as the market continues to tighten at a moderately aggressive pace. As fewer large blocks of space become available, more landlords will seek to pull their office rents up, closer to those of new construction.

Leasing Activity

Large transactions completed in the last 90 days: 

  • Deloitte will relocate from One Financial Plaza to approximately 130,000 s.f. in the top floors of 50 South 6th Street, a premier, Class A building in the downtown CBD. This space is currently occupied by Fallon Worldwide who will be leaving in the fourth quarter 2008.

  • Welsh Companies will build a 100,000 s.f., Class A facility in Minnetonka, MN. The building will serve as headquarters to both Welsh and Petters’ Companies.

  • Fingerhut signed a 90,000 s.f. lease at Superior Plaza, a single-story office development in Eden Prairie, MN.

  • Personnel Decisions International will relocate to approximately 86,000 s.f. in the 33 S. 6th St building in downtown Minneapolis. This represents a relocation from the neighboring Plaza VII Tower. Both buildings are Class A towers. The space at 33 S. 6th St was recently made available when the law firm Rider Bennett dissolved and gave back its space to the Landlord, Brookfield Properties.

  • Virtual Radiologic signed a lease for 81,645 s.f. of Class A space at Windsor Plaza. Windsor Plaza will be a five-story, mixed-use facility located across the street from the Eden Prairie Shopping Center in Eden Prairie, MN.

  • Staywell Health Management leased 71,000 s.f. at Boulder Lakes III, a new Class A development in Eagan, MN.

  • Softbrands, Inc will relocate from 61,000 s.f. at Two Meridian Crossings to a 28,000 s.f. Marsh sublease at LaSalle Plaza.

  • Nestle HealthCare Nutrition signed a lease for 60,070 s.f. at the Crosstown Office Center, a Class B office redevelopment in Minnetonka, MN.

  • United Health Group signed two leases this quarter:

    • a sublet for 60,000 s.f. of swing space at Two Meridian Crossings, a Class A building in Richfield, MN.

    • 22,000 s.f. of growth space at Prairie Crossroads, an office/showroom building located in Eden Prairie, MN.

  • Amcon signed a 30,000 s.f. lease at the 10400 Yellow Circle Drive building in Minnetonka, MN.

Several large transactions are in play:

  • GMAC Rescap, formerly GMAC-RFC, announced that in January 2008, it will consolidate its employees into its 250,000 s.f. facility One and Two Meridian Crossing and sublease 270,000 s.f. of Class A space at the Normandale Lakes Office Park. This sublease at Normandale Lakes Office Park adds another vacant Class A office tower to the 494 submarket, a submarket that already will have nearly 1 million s.f. of Class A office space delivered in the coming year.

  • The Hartford Group is rumored to be very close to signing a lease for approximately 120,000 s.f. at Norman Pointe II, a 322,000 s.f., Class A new development by Duke in Bloomington, MN.

  • ADC will put approximately 100,000 s.f. of Class A space on the sublease market in Eden Prairie, MN.

Tenants in the Market:

  • Capella University remains in the market place for 300,000 s.f. and can possibly expand that requirement up to 400,000 s.f.  It is currently located in multiple Class A buildings in downtown Minneapolis and is looking at opportunities in both downtown Minneapolis and St Paul as well as in the inner suburbs. 

  • ECMC is looking in and around Downtown St Paul for approximately 130,000 s.f. of Class B office space. It is one of the largest non-government tenants looking at space in downtown St Paul. Its current lease expires in first quarter 2009 and it plans to make a decision by the end of the first quarter 2008.

  • Fallon Worldwide plans to downsize from 90,000 s.f. to 50,000 s.f. when its lease expires in fourth quarter 2008.  It will most likely move from 50 South 6th Street, a Class A “Nicollet Mall” building, to either a more creative warehouse district space or another Class A building in Downtown Minneapolis.

Building Sales

  • 5th Street Towers (1.1 million s.f., Class A), a two building complex in Downtown Minneapolis,  sold for $185 million ($168/s.f.) to Strategic Real Estate Advisors from London, UK.            

  • Grand Oak Office Park (530,000 s.f., Class A and B), a ten building park in Eagan, MN, was sold by Interstate Partners to BPG Properties.

  • Dain Rauscher Tower (600,000 s.f., Class A) in Minneapolis was recently put on the market by Brookfield Properties.

Construction Activity

  • Norman Pointe II (322,000 s.f., Class A), Bloomington, delivered November, 2007.  

  • Opus Office Development is in the works on a 35+ story, mixed-use tower on the Powers Site at the north end of the Nicollet Mall in Minneapolis CBD, which will consist of approximately 300,000 s.f. of Class A, LEED-certified office space, a hotel, and 30,000 s.f. of retail on the main level.

  • Ryan has begun construction on the second building of its three-phase Two Market Point development in Bloomington, MN. CBRE will be leasing 70,000 s.f. of the 236,000 s.f. building.

  • Other new buildings under construction include:

    • Excelsior Crossings (450,000 s.f., Class A), Hopkins, with expected delivery of March, 2008.

  • United Health Group Office Building (350,000 s.f., Class A), Minnetonka, with expected delivery of May 2008.

Printable Version of this market | Printable Version of all markets

| Atlanta | Boston | Chicago - CBD | Chicago-Suburban | Cleveland | Dallas | Denver | Detroit |
| Ft. Lauderdale | Hartford | Houston | Los Angeles | Miami | Minneapolis | New York |
| Northern New Jersey | Northern Virginia | Orange County | Orlando | Philadelphia | Sacramento |
| San Francisco | San Francisco Peninsula | Seattle | Silicon Valley | Suburban Maryland |
| St. Louis | Tampa | West Palm Beach - Boca Raton | Washington, D.C. |
| National Retail Highlights |
Jones Lang Lasalle

www.joneslanglasalle.com
(c) 2007 Jones Lang LaSalle IP, Inc. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle IP, Inc.