Three years after developers first proposed the project, they will break ground next week on their 10 West End office building in St. Louis Park — even without a signed tenant.
Minneapolis-based Ryan Cos. and the St. Louis Park-based Excelsior Group have secured financing for the 11-story office complex that will be one of only a few speculative office properties to be built in the Twin Cities in recent years.
The 343,000-square-foot building, located at the southwest corner of Interstate 394 and Hwy. 100 near the Shops at West End, is expected to be completed in early 2021.
"The 394 office submarket and specifically the West and South market remains incredibly strong," said Tony Barranco, senior vice president of real estate development for Ryan Cos. "More space is needed to meet tenant demand."
The developers originally proposed the project in 2016. At the time, Ryan Cos. would not say whether construction would begin without a signed tenant.
After it received unanimous approval from the St. Louis Park City Council, developers ramped up marketing efforts to land a tenant, but nothing was announced.
"Since many tenants do not start leasing until less than two years from occupancy, we need to advance with construction," Barranco said. "We remain very bullish about the project and are excited to get started."
A high-end "class A" office building has not been built in the area since the late 1990s.
"The Excelsior Group has been in the West End market for a long time. … We've just seen frankly almost insatiable demand from office users," said Chris Culp, chief executive of the Excelsior Group. "We're just really excited about the market and we think that intersection is the place to be for office users."
According to a recent quarterly report from real estate firm CBRE, the 394 corridor had the second-highest asking rental rate (only behind the North Loop) among Twin Cities real estate submarkets.
The 10 West End building is planned to be an energy-efficient building, with full fitness facilities, an expansive bike room and a rooftop deck with views of downtown Minneapolis.
The developers did not detail the cost for 10 West End, saying it will vary based on tenants' build-out spaces, Culp said.
The plan was always for 10 West End to be the first phase of twin office buildings (the other dubbed 20 West End). The developers still plan to build the second phase, but the timing will be based on demand, Culp said.
The 10 West End building will be a "shot in the arm" and add to recent development in that area of the city, said Greg Hunt, St. Louis Park's economic development coordinator.
"This has been a much anticipated development, and we are delighted that it's coming to fruition," he said.
Ryan Cos. and the Excelsior Group are serving as co-developers on the project. Ryan will build it, with Excelsior managing the property and Transwestern responsible for leasing.