The Twin Cities office sector is seeing growing tenant interest in the adaptive reuse of former single tenant and functionally challenged office properties.
Developers and owners are repurposing older buildings and reintroducing them to the market as multitenant properties. They’re reimagining, reworking and investing in these buildings, many of which are highly desirable given their prime locations and architectural character.
What are the demand drivers for adaptive reuse of office space?
It should come as no surprise that location is the first demand driver. At Opus we look across the Twin Cities and each submarket being uniquely different, we have to consider what each offers. What’s the value proposition? In the Twin Cities, there are certain geographic submarkets where there’s great opportunity for adaptive reuse. One example is the highly desirable office corridor along Interstate 394.
Lack of new office space
New office space coming to the Twin Cities market is very limited relative to the existing inventory. Most new office space delivered, with a few exceptions, has been build-to-suits, meaning there has been little opportunity for multitenant users seeking new space.
Accelerated Project Timeline
The adaptive reuse process allows owners to bring space to the market in a fraction of the time required for a ground-up development. Simply put, if you don’t have product up, it is going to be challenging to meet the timeline for many of the users, ranging from 30,000 square feet to 100,000 square feet. They need space inside of 12 months.
Touch and Feel vs. Visualization
Another aspect that differs from new construction is a tangible perspective tenants experience by walking the building.
The difference between pitching an idea and envisioning an office space vs. walking through a physical office space is meaningful. They’re walking through the physical space. They have to re-imagine how they will use the space, but you can see very quickly when users come in and you start telling them the vision of what it’s going to look like, they start to make that mental connection of how they can work and occupy the space.
Companies are working differently, requiring amenities
As companies adapt to the modern workforce, so, too, will their office spaces. These former single tenant buildings provide the space to create a full amenity package including rooftop decks, fitness and collaboration space. While each building is unique, flexibility and creativity are essential ingredients to successfully positioning a compelling market-responsive solution. For example, based on the vintage of the asset a large floorplate creates a unique connectivity that is very hard to replicate. Repurposing excessive circulation corridors, excess back of house space and rooftop terraces into modern, functional and creative amenities reinforces the value proposition and expectations of office user’s expectations into the future.
Many users are drawn to the character of a 1950s vintage building and the many unique features that would be very difficult to replicate in today’s market. Existing finishes, if incorporated thoughtfully, respect the original character of the building while simultaneously offering a fresh and vibrant new experience. Additionally, exposing some of the structural elements with vintage buildings enables users to create truly unique space.
This article originally ran in MNCAR's e-newsletter.