What will Wells Fargo towers do to the downtown real estate market?

As trans­form­a­tive as a $400 million development pro­ject will be for one side of down­town, it threat­ens to leave an­oth­er side with some gap­ing holes should Wells Fargo choose to pick up and leave some of its down­town of­fices.

It's space that won't eas­i­ly be filled giv­en cur­rent of­fice mar­ket dy­nam­ics, and the company's effort to consolidate workers will cast its own eco­nom­ic rip­ples, said Brent Erickson, seni­or di­rec­tor at Cushman & Wake­field/NorthMarq.

In the Twin Cities, the bank's huge workforce is spread across at least 16 lo­ca­tions from Eden Prairie to Eagan to Shoreview. About 7,000 of the more than 20,000 employees Wells Fargo has in Minnesota work in downtown Minneapolis, in 14 buildings.

The bank has said it plans to stay put in its local head­quar­ters down­town in the tall, gold­en Wells Fargo Center next to the IDS Center. Ev­er­y­thing else ap­pears to be up for grabs.

"It's a big guessing game," Erickson said.

Paige Rickert, a down­town of­fice leas­ing bro­ker with CBRE, said it will take time for Wells Fargo to fill in the details of its plans.

"I think it will be 24 months at least be­fore we find out where they're com­ing from," Rickert said. "I think we'll be ask­ing this ques­tion a year from now."

Real es­tate professionals say candidates for consolidation include the bank's big Wells Fargo Home Mort­gage cam­pus in south Minneapolis, which is full, and sev­er­al of its down­town of­fice spots.

Those include the Northstar Center, where it leas­es about 520,000 square feet, and the Baker Center, where it leas­es about 450,000 square feet. Both build­ings are old, but the cheap Class B of­fice space could play in fa­vor of the bank stay­ing.

If the bank were to shift those work­ers to the Downtown East space, local re­tail­ers would clear­ly take a hit. But the greater im­pact, some bro­kers said, would fall on the own­ers of those spe­cif­ic properties.

A few sug­gest­ed that the build­ings might be best re­devel­oped for another use al­to­geth­er, such as apart­ments, or perhaps even torn down.

The Travelers Cos. Inc., the New York-based in­sur­er that owns the Baker Center, declined to com­ment. PCCP LLC, a real estate investment firm in Los Angeles that owns the Northstar Center, couldn't immediately be reached for comment. The company handling leasing for Northstar said Wells Fargo and PCCP are talking.

"There's a lot of discussion about that right now with PCCP and there will be some sort of strategy development over the next couple of months," said Frank Jermusek, president of Northco Real Estate Services in St. Louis Park. "They'll probably have to make some difficult decisions over the next couple of months or the next year."

The building is in an excellent location, Jermusek said, and is still "in relatively good shape."

While some real estate professionals ar­gue that Baker and Northstar are func­tion­al­ly ob­so­lete for of­fices, Rickert dis­agrees.

"If Wells Fargo moved out of ev­er­y­thing they had in those two build­ings it would be four [or] five years for those build­ings to get their oc­cu­pan­cy back up to good lev­els," he said. "If those own­ers are will­ing to put in some up­dates to those build­ings, there's a mar­ket for them."

Retaining the jobs within the down­town is worth such a po­ten­tial­ly pain­ful loss, said Steve Cram­er, pres­i­dent and CEO of the Minneapolis Downtown Council and the Downtown Im­prove­ment District.

"I don't dis­count the chal­lenge that fill­ing those va­can­cies will pres­ent to the prop­er­ty own­ers," Cram­er said. "But look­ing at it from an over­all per­spec­tive, the Downtown East pro­ject re­al­ly hits so many of the goals of the Down­town Council's 2025 plan that it's one that we clear­ly sup­port."

Chuck Lutz, dep­u­ty di­rec­tor of the city of Minneapolis Community Planning and Economic Development, said he's heard a range of possi­bili­ties, in­clud­ing shift­ing work­ers to Minneapolis from Charlotte, N.C.

"They're not talk­ing," Lutz said of the bank. "I wish I knew more, just like ev­er­y­bod­y else."

Jen­ni­fer Bjorhus • 612-673-4683