Minneapolis developer Schafer Richardson is testing how hot the North Loop market actually is with plans for another large office building near Target Field.
The company has outlined an 11-story, 200,000-square-foot building for the Weather-Rite site at 616 N. 5th St., thrusting itself into the nearby office development fray.
Houston-based Hines is currently constructing a seven-story building called T3, made from engineered wood, and Bloomington-based United Properties is considering a 10-story office building immediately adjacent to the Target Field Station light-rail stop.
Schafer Richardson already owns the 3.5-acre site that’s home to a two-story industrial building used by Weather-Rite, a maker of heating, venting and air conditioning systems. And the North Loop neighborhood is Schafer Richardson’s home turf.
“We own a lot of office property in the neighborhood that is essentially fully leased,” said Maureen Michalski, director of development for Schafer Richardson. “There is demand and we believe there will be continual demand, but the key is the large users and attracting those users to the project.”
North Loop has the lowest office vacancy rate of any Twin Cities submarket. In the last two years, rents there have risen nearly twice as fast as the region’s overall rate.
Michalski said Schafer Richardson will still wait to begin construction on the 11-story building until it has at least half of it under lease.
Hines began construction on T3 without any tenant leases. United Properties, whose project is now in the city approval process, has said it won’t begin work until it has some lease assurances.
Schafer Richardson tapped UrbanWorks Architecture to design its building, which the firms say has an “urban-industrial aesthetic” and flexibility for various types of renters. If constructed, the building will feature a saw-toothed roofline that would allow more sunlight in on the north and the possibility of solar panels on the south.
“We think that aesthetic fits well within the neighborhood and appeals to the users who would be attracted to the North Loop,” she said.
Plans call for one floor of underground parking and two above-grade parking levels which would be wrapped by retail or more active street-level uses around the perimeter as well as the amenities of many new office buildings, such as a fitness center and elevated outdoor space.
“It’s clearly a great office location and is highly visible from [Interstate] 94/394. We think we can offer something a little different,” Michalski said. “And it’s flexible, too. There’s opportunities for customization.”
Schafer Richardson’s leasing team hopes to release a full information package to the market in mid-April.
The project will occupy about one-third of the entire site owned by the developer. If this project goes well, Schafer Richardson hopes to build out the remaining space in two additional phases.