It remains a challenging time for the office sector, with many companies still not sure when, or if, they will bring their employees back to their cubicles and conference rooms on a full-time basis. That doesn’t mean, though, that developers haven’t been busy transforming outdated office buildings into modern space that will help companies attract and retain employees when they are ready to bring their workers back.
A good example? In Edina, Minnesota, a suburb of Minneapolis, City Center Realty Partners (CCRP) recently completed a multi-million-dollar renovation of one of the three buildings in The E office campus. The campus was the former headquarters of Regis Corporation.
The renovations have paid off. CCRP, which owns the 11-acre office complex in a joint venture with Contrarian Capital Management, said that the renovated building, located at 7201 Metro Blvd. in Edina, is now 50% leased. That’s quick, considering that the renovations weren’t completed until late in 2021.
Eric Anderson, executive vice president with CCRP, said that the goal was to create a boutique office experience at a reasonable price point. As Anderson said, CCRP wanted to bring that urban chic feel into the suburbs.
“You need to provide something that tenants can use to attract their employees back to the office,” Anderson said. “In addition to the hospitality-style amenities, we have unique touches at this building. We have a restaurant group on the site that is essentially a personal chef for the building. We had a local artist who designed murals for the lobby. We have sculptural LED lights that look like works of art.”
Specialty financer Mitsubishi HC Capital America will occupy 17,641 square feet of the building, while Relievant Medsystems, a medical device company, will occupy 12,754 square feet of the 107,000-square-foot building. Recently, Spell Capital also signed a lease at the building for 7,867 square feet while Employer Solutions Group signed one for 12,754 square feet.
The renovations that CCRP completed were not minor, costing $7.5 million. The goal was to modernize the property with an urban design and top amenities.
This is key for office owners today: Companies are looking for office spaces that are modern and that feature several amenities. The hope is that these amenities will help companies convince their workers to happily return to the office, at least on a part-time basis.
New amenities at The E include an on-site fitness center, training and conference rooms and a patio bar. The E also features several amenities designed to boost the mental and physical health of workers. At the Edina building, this includes a fleet of shared electric bicycles; chef-prepared meal program from The Wandering Kitchen, which offers personalized menus for tenants; abundant natural light on all floors; and a touchless entry and elevator system.
“There are so many reasons why our team will be motivated and productive at the E. We love the collaborative spaces, creative design, 360-degree views, the shared e-bike fleet, convenient location and the fully equipped fitness center with lockers and showers,” said Jim Teal, president and chief operating officer at Mitsubishi HC Capital America, Vendor Services, in a written statement. “Moreover, we were impressed with City Center’s personal touch, and how welcomed they made us feel. We are excited to be one of the first tenants and look forward to working in such an inspiring and modern space.”
Chris Geyen, chief financial officer with Relievant Medsystems, said his company, too, was searching for an office space that offered an amenities package that would boost the productivity and health of employees.
“It was essential to find a location that would provide an exceptional environment for our employees to work and collaborate with options to expand,” Geyen said in a written statement. The E meets all those needs for us.”
HGA’s Minneapolis office led the design efforts for the renovation process, while brokerage firm Newmark has led the leasing.
The E also offers a strong location. It not only comes with easy freeway access but is located near a regional bike trail. Employees, then, can bike to work if they’d like or enjoy a bike ride on their breaks.
Two childcare facilities are also located adjacent to the property, a bonus for workers who need daycare.
Anderson said that the success of this first building is evidence that the office market can return to an active state. The key is to give workers and companies the amenities and services they need to be successful.
“We are seeing all kinds of activity at this building,” Anderson said. “As I look across the office market here as a whole, I am seeing more people out looking for office space. I live in downtown Minneapolis. Not too long ago, when I got in my car I’d have my own personal freeway. Now I am starting to see the traffic jams of people getting out and about. I don’t like traffic jams, but it is a good sign that people are going back to their offices. I think we are starting to come out of the worst of this office cycle.”