After $96M remodel, Northstar Center owner looks to sell downtown Minneapolis offices

A little more than a year after its $96 million overhaul, the office portion of Northstar Center appears to be on the market after failing to gain traction in downtown Minneapolis’ post-pandemic landscape.

Taconic Capital, the New York-based investment firm that owns the 17-story west tower, is quietly shopping the building, according to people who have been told about the sale efforts.

The office complex had become dated and dilapidated in the decades since its 1963 opening. After buying the property in 2017, Taconic partnered with developer Polaris Properties to remodel the west tower offices, the skyway level, the ground floor and the 975-stall parking ramp.

But the project had unlucky timing. The rise in remote work after the COVID-19 pandemic made Northstar’s bid to be a luxury office and event destination tougher to achieve.

Still, its developers bet a focus on hospitality and flexibility could make for a standout offering in Minneapolis’ robust corporate community, which had started announcing return-to-work policies as the remodeled offices opened in late 2024.

“We’re pretty confident that we’ll have a great audience of interested users as soon as we open these doors,” Polaris developer Matt Legge said at the time.

He added that Northstar was “supposed to be a reason not to work from home and a compelling reason to want to be downtown in general.”

It’s not alone in its challenges. Though office occupancy rates seem to be stabilizing after a post-pandemic wave of downsizings, downtown Minneapolis still has above-average vacancies. That’s fueled competition for the limited pool of new lease seekers, according to fourth-quarter brokerage reports.

It also remains a tough time to sell an office building. Several properties in the central business district sold for deep discounts in 2025 as the market recalibrated to shifting work preferences and a difficult financing environment.

A representative from Taconic declined a request for comment. The firm started winding down its commercial real estate operation last year to focus on other strategies, according to Bloomberg. Legge also declined to comment.

Legge was deeply involved in the Northstar redesign, weighing in on details down to the vintage knickknacks decorating shelves and the 1960s playlist serenading commuters in the skyway.

Polaris hired the Good Eating Co., a premium brand of food services giant Sodexo, to run Northstar’s events and culinary program. Under Legge’s direction, Good Eating brought nostalgic concepts to Northstar’s ground-floor food court, including a general store and a homestyle cafeteria.

Polaris tapped Restore because it wanted a local operator, Restore owner Matt Monroe said. He said his team was able to cut costs by more than 50%.

“I think there’s a massive opportunity with this building, especially for someone who knows the market,” Monroe said, adding there was substantial interest in the space for corporate events.

But after a few months, Taconic changed course, this time notifying Restore of its plan to stop using its services. Event bookings ceased, and since December, the cafeteria, coffee stand and general store have sat locked and empty.

Robert Kraemer, whom Restore hired in June to run the co-working space before he left in October, said the developers “did a phenomenal job of reinventing and reimagining this property.”

“The vision was there,” he said. “It was the execution and daily operation that wasn’t working.”

A spokeswoman said Northstar’s property management team, central location and amenities attracted the nonprofit. So far, she said, the space has been “a wonderful new home.”

Legge previously said he didn’t expect Northstar to sign tenants before the remodel — as some lenders or developers require to reduce risk — because of Northstar’s rundown former state.

“They won’t believe it’s real until they see it,” he said in 2024.

Since the pandemic, demand has been greatest for high-quality, move-in-ready office space with amenities. That could be a boon for Northstar, which focused on redeveloping floors seven through nine toinclude state-of-the-art meeting spaces, a rooftop terrace and a nine-hole putting course.

The upper levels could be a tougher sell. Developers left floors 10 through 17 largely untouched, in hopes the other renovations would attract a major business interested in building a custom office space.

All three projects received state and federal historic tax credits, with about $20 million going to Taconic and Polaris’ piece. Selling the property could mean losing out on some of those dollars since Northstar has not been in service for five years, the length of the federal government’s compliance period.

Brokers and developers said it’s too early to judge Northstar’s success.

Hempel Real Estate CEO Josh Krsnak, whose firm boosted downtown’s LaSalle Plaza with renovations and new tenants since buying the building at a discount in 2023, said the exploration of a sale isn’t necessarily a sign a property is struggling. New ownership also doesn’t always solve a building’s challenges, he said in an email.