In commercial real estate, the term “creative office” can be defined as any space not originally intended as an office now being used as one. For instance, the converted 19th century warehouses of Minneapolis’ North Loop are creative office space because of their original industrial identity.
The term can also can apply to new-construction projects emphasizing the kinds of things creative office users want, such as flexible, open spaces; energy efficiency; environmental sustainability; and interest-grabbing amenities.
The recent emergence of “creative office” as the hottest sector of the overall office market has created some winners and losers within the Twin Cities’ market geography. The North Loop, northeast Minneapolis and St. Paul’s Midway area have greatly benefited from the trend; downtown St. Paul, on the other hand, has not.
That may start to change with the opening in July of the 428, a new building on the former site of the downtown Woolworth’s store on Minnesota Street. Its locally based developer, Commercial Real Estate Services Inc., is betting the 60,000-square-foot, creative office building will furnish proof that with the right product, downtown St. Paul — even with its unsightly 20 percent office vacancy rate — can lure the tech-oriented companies and professional firms that landlords covet.
“We think downtown St. Paul is ready for the kind of building that we’re creating,” said Pat Wolf, the real estate firm’s owner. “What we’re doing with the 428 is providing the kind of space that tenants of today are looking for.”
The numbers say that’s precisely what downtown currently lacks. Most of the vacancies in downtown St. Paul are concentrated in older office buildings that are out of favor with the kind of tenants who would otherwise be attracted to the urban core and its bustling Lowertown social scene. Because of how they are constructed, it’s usually not feasible to reposition them for modern tastes by knocking out walls or installing bigger windows.
Some of these buildings have instead been converted to multifamily housing. But many others remain on the office market.
Because of that, Wolf’s vision for the 428 may seem counterintuitive for those accustomed to dismissing downtown St. Paul’s office market as forever struggling. But her project, as well as some other recent market signals, suggest that developers believe there is an unmet need for the “right kind” of office space there.
“To appeal to creative office users, we’re heavily emphasizing ‘well-building’ concepts and energy efficiency for the 428,” Wolf said. “In fact, the 428 will be the first building in Minnesota to pursue both LEED Silver and WELL Building Core & Shell certifications, and also the first in St. Paul to go after the WELL certification.”
LEED, short for Leadership in Energy and Environmental Design, focuses on the environmental impact of the building, while WELL considers the health and wellness experience of tenants. At the same time, it is incorporating nostalgic elements referencing the 1955 Woolworth’s store, such as the use of bricks that match the originals.
Meanwhile, other downtown St. Paul creative office projects are also evident: The much-heralded conversion of the former Ecoloab headquarters building into the Osborn370 Building qualifies because of its appeal to startup firms and freelancers; and the Ackerberg Group has floated a proposal to convert the former St. Paul Police Annex Building into a mixed-use project with a creative office space element.
“Those three projects are all different, but taken together, they do show there’s demand for creative office space in downtown St. Paul,” said Joe Spartz, president of the Greater St. Paul Building Owners and Managers Association. “I think it’s fantastic that we now have multiple options for these kinds of creative office tenants.
“Prior to the Osborn370, that didn’t really exist downtown, but within the next few years, we’re likely to have three creative office options. It will give the employer looking for space a choice to locate in St. Paul’s urban core, rather than just considering Minneapolis or the suburbs.”
Don Jacobson is a freelance writer based in St. Paul. He is the former editor of the Minneapolis-St. Paul Real Estate Journal.