The owner of Rand Tower, a historic Art Deco office building in downtown Minneapolis, is transforming it into a Tribute by Marriott hotel.

Maven Real Estate Partners plans to spend more than $86 million to convert the 26-story building at 527 S. Marquette Av. from office space into a 277-room hotel, said Nick Peterson, co-founder and principal of Maven.

The firm, which bought the building two years ago, initially planned to reposition it for tenants seeking short-term, flexible office space. It abandoned that idea in early 2018 because converting it to a hotel would be more profitable, Peterson said.

“The floor plates [the amount of leasable area on an entire floor of a building] are not as ideal for office going forward,” Peterson said. “It’s much more ideal for hotel and/or residential [use]. While the location is a class A location, you’re never going to be able to get the class A [office] tenant because of the lack of amenities, space and the size of the floor plates with how the current building is set up.”

Renovations are scheduled to be completed in December 2020. The second-story skyway system connected to the building will be accessible during construction.

The hotel will bear Marriott’s Tribute flag, a family of independent boutique hotels that attempt to pay homage to their surrounding neighborhoods. It would be the first Tribute by Marriott hotel in Minnesota. The brand has 23 locations in the U.S. at the moment.

Oxford Capital Group, whose portfolio includes luxury hotels such as the Langham Chicago and LondonHouse Chicago, will manage the hotel. Peterson said the Tribute’s interior will be similar to the LondonHouse Chicago, a 96-year-old building that was given a modernist look.

ESG Architecture & Design of Minneapolis is designing the makeover of Rand Tower.

The renovated hotel also will include a restaurant and bar on the fifth floor. In addition, Maven will build a 2,135-square-foot patio with a retractable glass roof on the five-story annex part of the building that will connect to the restaurant and double as a rooftop bar. The annex is located between the tower and adjacent Canadian Pacific Plaza at 120 S. 6th St.

Maven bought Rand Tower in summer 2017 for $18.7 million. The tower was built in 1929 by Rufus Rand, a pilot in World War I and WWII who was a member of the family that owned the Minneapolis Gas Co.

“Our goal is to have it be the iconic Minnesota hotel to celebrate a Minnesota hero, Rufus Rand,” Peterson said. “We hope that it [the area around the hotel] can be not only a hotel destination but also a fun area to go out or a fun part to celebrate something.”

The building, which is listed on the National Register of Historic Places, features terrazzo floors in the lobby and ornamental carvings over its entrances, one of which features Mercury, the Roman god of merchants and travelers, holding planes. Peterson said the renovation of the tower will feature and emphasize the building’s historic features.

The Tribute by Marriott hotel — which is planned as a four-and-a-half star lodging — will be the biggest addition to the downtown hotel market until the Four Seasons Hotel, planned for the new 37-story RBC Gateway building, is completed in 2021, Peterson said.

After a succession of new hotels in downtown Minneapolis during the run-up to the 2018 Super Bowl, construction cooled and the market absorbed the new capacity. The supply of hotel rooms in the area increased 3.9% last year while demand increased 5%, according to the June-August 2019 edition of a report by CBRE Hotels, the hospitality division of the CBRE commercial real estate firm.

This year, two new hotels opened in downtown: the Canopy by Hilton luxury full-service hotel that opened in the historic Thresher Square complex in February, and a Marriott Moxy hotel that is part of the Ironclad mixed-use development, where construction was finished earlier this month.