Not all office buildings are struggling to attract tenants today. Consider the SPS Tower in downtown Minneapolis.
The 31-story, 655,070-square-foot Class-A office tower completed 66,000 square feet of new and renewed leases in the third quarter of last year. A big contributor? A new 30,000-square-foot Regus workspace scheduled to open on the tower’s 21st and 22nd floors.
Other businesses that signed new leases in SPS Tower in the third quarter of last year were Schechter Dokken Kanter, A Twin Cities-based CFO, accounting and tax firm, which leased 14,000 square feet; Emergent Software, which is moving into a 6,700-square-foot spec suite; and Heritage Wealth Advisors, which leased a 4,200-square-foot spec suite.
Three existing tenants renewed their leases in the building during the third quarter, too.
SPS Tower stands out among its competitors thanks to its amenities. The building offers a two-floor spec suite space on the 19th and 20th floors with a tenant lounge, meeting spaces and a podcast studio. Earlier this year, FRGMNT Coffee opened in SPS Tower’s skyway level.
And one of the more unusual amenities? The Turf Club, the largest lawn in downtown Minneapolis. The Turf Club offers a putting green and entertainment space.
We spoke with Jim Montez, vice president of agency leasing with the Minneapolis office of Transwestern, about the reasons behind the success of SPS Tower. Montez handles leasing for the tower and has seen firsthand just how popular this space has become with tenants. Here is some of what he had to say about the leasing activity at this key Minneapolis property.
Why have you seen such high leasing activity at the SPS Tower?
Jim Montez: It’s a great building. It’s a classic. It was built in the late ‘80s by a developer out of Dallas. If you were building a tower today, you would never to be able to afford to do what they did. It is a fundamentally high-quality building, and that helps to attract tenants. The building also has great ownership.
From there, it’s about building an ecosystem that attracts tenants. This building was originally supposed to be two buildings. The second one was never built. So it has double the amount of parking that the typical building in downtown has.
We also have half of block of green space that we call the Turf Club. We program that with live music at least once a week in the summer. We bring in food trucks. We have a bags tournament. Last year, we had more than 70 teams participate in the bags league. There’s a putting green there and people play bocce ball there. It’s a place to get out of the office and get fresh air.
The building was also recently renovated, too, right?
Montez: There was an interior renovation anchored by the addition of FRGMNT Coffee. Prior to that, there were marble and granite everywhere. It was all hard, shiny surfaces. People just passed through it quickly. With the renovation, we created zones anchored by food and beverage. There are now places for people to hang out and sit, places where employees can get out of the office. The first floor is curated like a fine hotel lobby.
This success, though, would not have happened without the ownership, Sumitomo Corporation of Americas, which purchased the tower in 2019. At that time, we were studying all the ways to make an office tower successful. But nobody was prepared for a pandemic. When COVID hit, we decided to wait and see what happened. Two-and-a-half to three years ago, we started seeing new patterns. We saw that people wanted places to bring their teams to, that they wanted amenities and private spaces. We incorporated those ideas into our renovation. Those ideas have been a big catalyst for the leasing momentum we are now seeing.
More renovation work is planned for the building.
Montez: Yes, the next phase of the renovation will include an addition to our conference center. We are going to offer a big training area that many buildings don’t have today. We are also going to add more tenant lounge spaces. Employers are trying to get people back to the office. A building that supports those efforts is desirable.
Companies are leasing space in office buildings that are attractive to their employees. In the past, before the renovation, we’d have people looking at the building and they’d tell us it was pretty but that nothing was happening. After the renovation, people tour the building and they see people, activity and energy. They can see their employees enjoying working in this space. That is the environment here.
How big of a role do these amenities play in attracting tenants?
Montez: They do play a big role. It helps that also have world-class management. The tenants are well cared for. The average tenant here stays for 17 years. We don’t give them any reason to leave, which is another part of the success story for this building.
Amenities like the Turf Club are so important. That grassy area creates a campus feel. That’s important for companies that are trying to attract younger workers. This isn’t just a plain office. People can go outside and get fresh air. The Turf Club is a great amenity.
Are you seeing improvements in office leasing activity in the Twin Cities CBD today? And how is ICE activity and the resulting protests impacting the area?
Montez: If you just watch it on the news, it looks like the protests and ICE activity are happening in downtown Minneapolis every day and that they are very disruptive to businesses. That activity, though, has generally been in the neighborhoods outside of downtown. It has not been present much in the CBD.
But like every other urban city, we are dealing with the changing work world. We are never going back to seeing everyone work five days a week from the office. It will probably be three to four days a week for most companies. But we are seeing a recovery in the CBD. That is real. You can see it. It’s a welcome sight. There is still work to be done, of course. It is still tough on the retailers and restaurants in the CBD. It’s tough for them to operate when you only have a reliable customer base three days a week.
But we are seeing more activity in the CBD. We will see more in 2026. We will just keep building the momentum and moving forward.
Are you still seeing a flight to quality when tenants are looking for new office space?
Montez: Absolutely. SPS has had good success. The Wells Fargo Center has had good success. North Loop Green is successful. Those are all high-quality buildings that are amenitized appropriately for what the buildings are. That’s important. Buildings need to be what they are. When you try to force them into something they’re not, it doesn’t work.
