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Real estate: Office space at the right price
Despite getting some new tenants, the 701 Building still sits half empty. Brokers hope a space giveaway promotion can attract interest in the downtown Minneapolis property.
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Call it a sign of the times.
The lackluster demand for office space has prompted brokers marketing the 701 Building in downtown Minneapolis to offer a small amount of space for free. It's an unusual promotion designed to spark interest in the 286,000-square-foot office tower at Seventh Street and Fourth Avenue S., currently about half empty. That's considerably higher than the 18 percent average vacancy rate for downtown office buildings as of the third quarter, according to figures from the Twin Cities office of Colliers Turley Martin Tucker.
Representatives of potential tenants have until Dec. 31 to enter to win the free space offer on the building's skyway level. The winner will be chosen at a luncheon at noon Jan. 7.
The offer is good for 2,010 square feet through the end of 2010, according to Erin Fitzgerald Wendorf, a leasing agent in the Twin Cities office of CB Richard Ellis (CBRE).
CBRE took over property management and leasing last year at the 701, which has undergone extensive renovation since it was purchased for $15.3 million 2007 by Cawley Partners, a Dallas-based real estate investment company. Improvements include a new fitness center and conference facilities for building tenants, Wendorf said.
Built in the early 1980s, the 701 previously was known as the Craig-Hallum Building, named after the former regional investment banking firm. It most recently was owned by an entity that evolved into New York-based Colonnade Properties.
Designed by well-known architect Helmut Jahn, the building has a glass exterior and hexagonal shape that make it stand out on the downtown skyline. Its major tenants have included Lutheran Brotherhood, which moved out several years ago after merging with Aid Association for Lutherans to become Thrivent.
The building was about two-thirds empty when Cawley bought it. Wendorf said occupancy has increased with the addition of several small professional services firms and the Hennepin County Public Defenders Office, which leased more than 60,000 square feet last fall.
New tenants for PasterPaster Enterprises, a St. Paul-based developer and manager of neighborhood shopping centers in the Twin Cities area, recently announced new tenants at four of its 12 malls.
Sibley Plaza in St. Paul has boosted occupancy to 96 percent with the addition of a 1,969-square-foot Pizza Mafia restaurant.
Sports Source, a 4,138-square-foot sporting goods store with a batting cage, will open next month at Lakeville Crossing in Lakeville, bringing occupancy to 91 percent.
Last week, Media Traderz, a retailer that specializes in DVDs, CDs and gaming systems and software, opened at Lexington Plaza in Roseville. An Ultra Tan salon also opened last week at Mounds View Square. Both centers now are filled.
Meanwhile, Paster said it will begin work next fall on a redevelopment and expansion of its Mendota Plaza in Mendota Heights. The plans call for adding a 14,820-square-foot Walgreens, a 7,600-square-foot restaurant building and constructing 12,000 square feet of additional retail space.
Susan Feyder • 612-673-1723
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