Two local developers are teaming up on a new office tower in the West End district of St. Louis Park, adding to a list of office projects that might get built but don't have tenants at the moment they are announced.
Ryan Cos. and the Excelsior Group LLC say they plan to build an 11-story office building at the southwest corner of Interstate 394 and Hwy. 100, near The Shops at West End.
If built, the 315,000-square-foot structure would be the first new Class A (or top tier) office building along the I-394 corridor in the Twin Cities in more than 16 years, the developers said.
Ryan, based in Minneapolis, said the project will take 15 months to build but it does not know when construction will start. Late fall is the earliest possible start date, Ryan said, but next spring is more likely.
The developer would not commit either way on whether it would begin construction without a signed tenant.
"It's an incredible opportunity in a really strong submarket," said Tony Barranco, Ryan's vice president of development.
This will be the first of a two-phase office project, the developers said. Excelsior, based in St. Louis Park, owns the two large parcels sandwiched between Utica Avenue S. and a Hwy. 100 South on-ramp where the developers plan to build "twin" office buildings.
It's the latest in a series of new Class A office building announcements for the Minneapolis suburbs; the others have yet to come to fruition.
Artis REIT, a Winnipeg-based real estate investment trust, has proposed a 14-story office tower farther west on I-394 in Minnetonka, adjacent to the Carlson Center. Ryan is Artis' development partner on that project.
A few weeks after Artis announced its plans last fall, Bloomington-based United Properties followed suit, revealing its own plans for a 15-story office tower near the intersection of I-494 and Hwy. 100 in Bloomington close to Normandale Lake.
Both the 394 and 494 freeway corridors are desired markets for office users. These projects will test the strength of the demand.
"I think a lot of these will be a go," Barranco said.
The west submarket, which runs along 394, has the lowest vacancies and highest rents in the entire metro area, according to the latest Compass Report by Cushman & Wakefield/NorthMarq. The average rental rate in the west is more than $19 a square foot, compared to the Twin Cities average of more than $16 a square foot and downtown Minneapolis' rate that is just under $18.
Only 10.4 percent of all Class A space is vacant in the west, compared to the entire Twin Cities Class A vacancy rate of 14.1 percent. Downtown Minneapolis' rate is 12.6 percent.
The southwest submarket, where United Properties hopes to build its tower, is slightly better than the Twin Cities as a whole, but not as costly or tight as downtown Minneapolis and the west.
Ryan and Excelsior's project is being called "10 West End" and will include the prescribed features of new office construction: a rooftop terrace, fitness center, ground-floor bike storage, outdoor balconies on each floor and "creative" work environments.
The site is at a key corner, just outside Minneapolis city limits, with access to mass transit and the Cedar Lake bike trail, a major bike path that connects the southwest suburbs to downtown Minneapolis.
"10 West End is the new urban, and will check all the boxes when it comes to attracting today's employees, offering the best of urban offices without the hassles," said Tom Tracy, vice president of the Excelsior Group, in a statement.