That’s why openings in Class A buildings, which are the newest and in prime locations, are leasing at a higher rate than lower property classes. The vacancy rate for those Class A buildings in the I-494 submarket is just 19%, 3 percentage points lower than Class B buildings, according to Colliers.
Brokers are celebrating several big leases in the area. Last month, Burns & McDonnell — a Kansas City, Mo.-based construction, engineering and architecture firm — said it will move from its 40,000- square-foot offices in Bloomington into much larger accommodations at the nearby Norman Pointe II building.
The site of the former Southgate Office Plaza in Edina. The plaza was torn down about a year ago. (Glen Stubbe/The Minnesota Star Tribune)
And in August, manufacturer Stratasys said it was consolidating some of its operations by moving its U.S. headquarters 10 minutes away to more than 164,000 square feet of UnitedHealth Group’s Minnetonka campus. UnitedHealth is one of several companies in the area that has been shedding office space.
Gelfman, who along with Nathan Karrick, is working on behalf of Norman Pointe’s owners, said the Burns & McDonnell deal is typical of what’s happening in the area: Companies want higher-quality space with better amenities. Norman Pointe is a newer building than the one Burns & McDonnell is leaving, and it’s on a parklike campus that has on-site day care and preschool, a cafe and a fitness center with showers and locker rooms.
Gene Sieve, vice president and general manager of the Upper Midwest region for Burns & McDonnell, said the company had outgrown its current offices, with 260 employees and intention to expand.
“We’ve been on a very steady growth curve over last 10 years and don’t see any signs of that slowing down,” he said.
