Downtown Minneapolis companies migrate to the North Loop
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A patio in the North Loop post-lunchtime. A crane in the background is helping construct a new apartment building. Photo: Nick Halter/Axios
Nicollet Mall has long been known as Minneapolis' Main Street, but perhaps North Washington Avenue should be given that moniker.
What's happening: Retailers, restaurants, and financial firms that you'd normally expect to see in the city center are flocking a mile away to the North Loop, while Nicollet Mall struggles.
- When Hubert White closes on Aug. 1, the only place to buy a dress shirt on the mall — once home to four department stores — will be Target.
Why it matters: More companies see the North Loop as a viable place to be. Once a neighborhood for ad agencies and tech startups, big financial firms including Piper Sandler and Varde Partners, and accounting firm KPMG have signed leases to move there from downtown.
- It boasts restaurants with James Beard Award-winning chefs, trendy boutiques, and boozy entertainment.
- Parking meter usage in the neighborhood last year was higher than it was in 2019, some months by as much as 27%, according to the Minneapolis/St. Paul Business Journal.
Reality check: Downtown remains the center of commerce and the focal point of the west metro area. It's the hub of transit systems and is served by three major freeways and filled with theaters, stadiums, and concert venues.
Be smart: Those three firms moving to the North Loop have another compelling reason: They want to be in North Loop Green — two towers rising next to Target Field.
- Brent Robertson of commercial real estate firm JLL is the leasing broker for the office tower. He said it's already 65% leased, with tenants signing for record rates. He expects it to be 90% full when it opens in January.
- Tenants want "the best of the best" that a newly built tower can offer, he added. The new RBC Gateway Tower on Hennepin Avenue and 10 West End in St. Louis Park also filled up with office tenants during the pandemic, despite overall high vacancies in the Twin Cities.
Between the lines: Office tenants also view the North Loop as being safer than downtown, said Mike Brehm, a commercial real estate broker for Kenwood Commercial who helps tenants find office space.
What's ahead: The North Loop, like much of the Twin Cities, still has a glut of sublease office space available because companies have decided to downsize due to remote work. But when that fills up — and Robertson mentioned that there's a lot of interest — it's not clear how much more the North Loop can grow.
- Most of the warehouses have already been converted to lofts and offices and there are just a couple of sizable parking lots left.
- "It's like 98% built out," Robertson said.