United Properties is planning to build a 15-story office building in one of the hottest areas for commercial development in the Twin Cities.
The Bloomington-based company said Thursday it wants to build the tower in its hometown next to the region’s most expensive business complex: Normandale Lake Office Park.
But the project, on parcels United owns near the corner of Interstate 494 and Hwy. 100, first must catch the eye of a large company looking for new digs.
“There’s a number of large tenants looking in the market that have specific space requirements,” said Bill Katter, president and chief investment officer for United Properties. “Large blocks of quality Class A office are becoming fewer and rental rates have continued to rise. All of those things have made us believe there is an opportunity here.”
The team is still in the early stages of predevelopment and marketing, hoping to land a tenant soon and deliver the estimated 455,000-square-foot project in as soon as two years from now.
United Properties will be vying for attention from office-seekers, competing not just with the giant Normandale Lake complex but also the Pentagon Park redevelopment happening just a half-mile away in Edina.
“This is a distinct project. This is the best site,” Katter said. “The southwest has historically been one of the strongest submarkets for rent rates and absorption. It has great infrastructure and proximity to Twin Cities in general and it has quite a few aging office buildings.”
A year ago this month, Normandale Lake Office Park shattered the Twin Cities record for largest real estate transaction when it was sold for $369 million. In addition to access to the services offered at Normandale Lake Office Park (carwashes, child care and a nearby 2,500-acre regional park), Katter said the project offers a greater ratio of parking spaces than competitor properties, with a recreation deck on top of the parking structure. He hopes to have on-site full-service restaurant, too.
The project is the latest in a spate of new office properties that Twin Cities developers launched over the past year.
Last November, Hines announced it was building a new office structure in the North Loop, and would do so with or without signed tenants. A week later, United Properties announced it was planning to do the same on a parcel adjacent to Target Field Station.
Hines has already begun construction. Katter said United is submitting its application and proposal to the City of Minneapolis for approval on its North Loop office project and expects to break ground in the spring or summer of 2016.
Landowner Artis REIT just last week unveiled plans for a 14-story office tower along Interstate 394 in Minnetonka next to Carlson Center. That project will also only move forward if and when the leasing team lands an anchor tenant. Also last week, Franklin Street Properties revealed its intention to build a 50-story tower downtown Minneapolis that would include an office component.
Just down Interstate 494 from Normandale Lake and the site of the new United tower, the Mall of America is nearly finished building the 10-story Offices at MOA structure and said last month it will begin work on a second office tower next year. A little bit farther down the Interstate, the Minnesota Vikings are planning a new headquarters and practice site in Eagan that will include a multiuse real estate development, including offices.