Tracking the “Amenities Boom” in Downtown Minneapolis

April 30, 2018  |  BY Mitch Hugdahl

amenities downtown Minneapolis

Image courtesy of Baker Center.

Companies want to be in downtown Minneapolis, even if it means paying more to be there. In 2017, we saw an overwhelming trend of companies moving their offices from suburban locations to downtown. Why? One simple answer: Millennials.

Gen Y employees are a driving factor behind the suburban-to-urban migration seen across the metro. They want to live, work and play in a streamlined location. In a tight job market like Minneapolis, companies are on the hunt for the “coolest” space possible.

And it’s not just employers who are taking note. Landlords are investing millions of dollars to update and transform their buildings all across the metro, especially in popular areas such as Minneapolis’ CBD, North Loop, the Warehouse District, and the red-hot West End. As an abundance of amenity offerings becomes the norm, landlords face a choice: adapt or lose key tenants. Here are a few of the amenities tenants are looking for in today’s Minneapolis office market.

On-Site Conference Centers and Collaboration Space

Employees want the option to work in different environments, depending on the task at hand. Employers are responding by offering a variety of work settings, giving employees the choice to work where they see fit, and providing ways to take a break and recharge. More and more buildings are incorporating creative work environments and common areas with soft seating, bar-height tables, huddle rooms, and other types of “collision spaces.”

Also, since sitting has been dubbed the new smoking, nomadic work environments have become more common in today’s office market. More and more companies are realizing that building a mix of different work environments, such as conference rooms for heads-down work or phone calls and open work space for collaboration, they can create a very efficient work environment for their employees. This is something landlords are clearly taking note of. Fifth Street Towers has gone as far as adding “Nap Pods” as a common area amenity for tenants who need to take a quick break.

In addition to increasing efficiency, when buildings offer on-site conference rooms and collaboration space, tenants can cut down on these types of environments within their own office space, reducing their footprint and resulting in substantial cost savings. However, it is also important for tenants to recognize that though their office space size may shrink as a result of a building’s upgraded amenity package, it will almost always result in an increase in rental rates. Also, although these amenities are not in each tenant’s usable square footage number, the costs are still being factored into their rentable square footage.

Fitness Centers

Fitness centers remain a common amenity in Minneapolis’ downtown office buildings. While fitness centers in office buildings is not anything new, landlords are raising the bar on the quality and type of fitness centers.

Fitness companies, such as Steele Fitness, which can be found in Capella Tower and the newly renovated Baker Center, offer a much more luxurious workout experience. Steele Fitness offers personal trainers, finely finished locker rooms, and state-of-the-art equipment. Though membership is not always free for tenants, it is considerably less expensive than joining a free-standing health club.

A few other common features these new-era fitness centers include are on-demand fitness classes, yoga classes, and spa-style locker rooms.

Outdoor Space

Minnesotans love the outdoors, but with our long winters, the opportunity to comfortably relax outside doesn’t happen very often. So, we need to take advantage of the few months we have. One of the newer features that continues to grow in popularity downtown is access to outdoor space. Baker Center, 5th Street Towers, PWC Plaza, Tractor Works, Millwright, T3 and 111 Washington all offer outdoor patio space. We will likely see this list continue to grow in the coming years, with talks of Capella Tower, 121 S. 8th St., and the Internet Exchange Building planning to check that box in the near future.

Ground-level outdoor space is also highly sought after by tenants, but it’s harder to come by. Surface space downtown is limited, which makes outdoor spaces like SPS Towers’ 333 Turf club, Marquette Plaza’s 1.5 acre Plaza Park, and 100 Washington’s zen garden/outdoor tenant lounge that much more unique.

Bike Storage

As simple as it sounds, bike storage is a major value add for Minneapolis office users. This may have something to do with the fact that Minneapolis was ranked #2 on CNN’s 2017 list of most bike-friendly cities in the United States and ranked the #1 fittest city in America by both USA Today and Forbes. When tenants have to store their bikes in their office, it not only takes up space, but it creates a mess, especially for the brave souls who bike to work year-round.

Some landlords choose to keep bike areas secluded and out of sight, while others, like T-3, use glass walls to showcase the space. Regardless of the design, providing tenants secure and easy bike storage is an inexpensive amenity that adds a lot of value for employees.

To take things even further, some buildings even provide on-site bike repair shops, to further encourage employees to take advantage of Minneapolis’ bike-friendly streets. While on-site bike repair shops will not likely become the norm, it’s certainly a unique feature that I’m sure will receive positive feedback from any bike enthusiasts in the building.

Offering bike storage can also cut down parking costs. Parking spaces downtown typically range anywhere from $175 to $350 per month. Biking to work can greatly cut down on occupancy costs.

Skyway Connectivity

Though this building feature is certainly not a new amenity, it still remains a top priority for many office users downtown. The convenience of being able to navigate your way around the city without ever stepping foot outside is one of the most unique things about Minneapolis and was certainly a major topic of discussion when Super Bowl 52 came to town.

When winter hits in Minnesota, it hits hard and having the option of leaving your office without having to face the elements is a major plus and can be a deciding factor for downtown office users.

At the end of the day, the goal is to create office space that employees can get excited about and an environment where people enjoy spending time. After all, much of our lives are spent in the office. Landlords and employers recognize that by offering a mix of work environments and keeping employee wellness in mind, you can take a big step in the right direction. Look for landlords to continue to invest capital in lobby renovations and other amenity additions throughout 2018.