Select Comfort will move its headquarters to downtown Minneapolis next October — the latest and one of the largest moves by companies into Minneapolis in the past few years.
The Plymouth-based company behind Sleep Number beds signed a 15-year lease for 211,000 square feet of office space at 1001 3rd Av. S. and will get naming rights to the building.
“We think this will be the right fit for Sleep Number,” said company spokeswoman Susan Eich.
In October 2017, the company will move more than 900 employees from Plymouth to the first three floors of the five-floor building. The new space will accommodate Select’s research-and-development and call-center employees.
The company will have room to grow and expects the location to aid in attracting new talent.
“The central location is appealing as well. We’ll be able to draw candidates from the entire metro area,” Eich said.
Select Comfort will work with HGA Architects to design the space, which is expected to have a cafe and fitness center for employees.
Eich said the company will save by moving from two buildings to one. Select Comfort will pay $10.25 per square foot in the first year of the lease and rates will eventually rise to $14.08 per square foot. Terms of the lease were disclosed in a filing with the Securities and Exchange Commission on Tuesday.
Select Comfort has more than 3,400 employees and more than 500 retail locations.
Steve Cramer, president and CEO of the Minneapolis Downtown Council and Downtown Improvement District, said Select Comfort will be a major addition.
“Their presence adds another internationally known brand name to our downtown business community,” Cramer said. “Their innovative style makes them an incredible force in the sleep industry, and we are excited to have their talented employees join our downtown workforce.”
Select becomes the latest company to move its headquarters into downtown Minneapolis. Last December, the nonprofit Be the Match, which promotes bone marrow and umbilical-cord blood transplants, moved 955 employees into 285,000 square feet of space in the North Loop neighborhood. Be the Match’s new building at 524 5th St. N. can accommodate up to 1,200 employees.
According to research from commercial real estate agency CBRE, which represented Select Comfort in its search, the Be the Match and Select Comfort moves are the two largest relocations to Minneapolis since 2013.
The addition of Select Comfort takes some of the sting away from the pending loss of Valspar headquarters. Earlier this year, the paint company announced it would be acquired by Sherwin-Williams. The effect on Valspar’s employment in downtown Minneapolis is uncertain, but the merged company’s headquarters will be in Cleveland.
Other moves into the downtown area include Arctic Cat, a maker of recreational vehicles, which moved its corporate headquarters and 85 jobs into a renovated 108-year-old building at 500 N. 3rd St.
About the same time, the ECMC Group, a nonprofit student loan guaranty agency, moved 500 employees from Oakdale to the Washington Square building at 111 Washington Av. S. That space could accommodate as many as 700 employees over the life of ECMC’s lease.
“There is an intangible benefit to continue to see downtown as a place that major employers, or employers of all types and sizes want to be,” Cramer said. “That’s why it is so exciting.”
Jim Vos — a principal in the Minneapolis office of Cresa, a corporate real estate advisory firm — said 30 to 40 companies of all sizes in the past three years have moved into Minneapolis from the suburbs, outstate or out of state.
“Most of our clients would say two things are driving it — either access to talent or access to transportation,” he said.
Vos also said that younger workers want to live, work and play in the same area, and Minneapolis has increasingly been providing that.
“There is a certain energy or vibrancy,” he said, “that at least our clients are saying they value about downtown.”