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Omni Viking Lakes Hotel

Twin Cities rising: 10 game-changing commercial real estate developments

By MinnPost, 04/13/20, 10:45AM CDT


Is the economy slowing down? Not if you keep watch on construction cranes in the Twin Cities.

Written by Burl Gilyard for MinnPost. Full article available here.

Is the economy slowing down? Not if you keep watch on construction cranes in the Twin Cities.

Development of new apartments, hotels, and industrial properties remains particularly robust. But there are also select office and retail projects under way.

We zeroed in on 10 large projects that all have game-changing potential in their respective markets. These aren’t blue-sky plans that someone dreamed up. The list includes developments that just opened, are under construction or close to starting, and some multiphase long-range projects that are already under way.

Market experts who keep waiting for apartment demand to slow down can keep waiting. Brent Wittenberg, vice president with Minneapolis-based Marquette Advisors, says that nearly 6,000 market-rate units were completed in 2019 and another 8,000 apartments could be delivered this year. Beyond that, his firm is projecting another 18,000 units in 2021 and 2022. Marquette Advisors tracks the rental market closely and publishes the quarterly Apartment Trends report. (It exclusively tracks market-rate units and does not count affordable, student, or senior housing.)

Community development and planning staffers in a number of cities throughout the metro say there’s little sign that developers are cooling on new apartments.

“We’re not seeing any slowdown,” says Karen Barton, community development director for St. Louis Park, of apartment projects.

“I think we continue to see strong fundamentals for multifamily,” says Phil Cattanach, director of real estate development for Minnetonka-based Opus Development Co. LLC. Opus is currently under construction on Vesi North Loop, a 218-unit project along the Mississippi River in downtown Minneapolis. The project is slated to open in June.

According to the local office of Los Angeles-based CBRE Group, there are currently 2.9 million square feet of industrial space across the metro. Of that, one million square feet is spec. The growth of e-commerce continues to be a strong driving factor for new industrial space.

The local industrial market is “as strong as ever right now,” says John Ryden, senior vice president with CBRE and a veteran industrial space broker.

As for hotels, downtown remains busy, but some suburbs are also bustling. There are currently two hotel projects under construction in Eagan and four under way in Bloomington.

“The trends in Bloomington are pretty clear,” says Schane Rudlang, Port Authority administrator with the city of Bloomington. “The market for hotels continues to be strong. The market for multifamily residential continues to be strong. And the market for office is not.”

Omni Viking Lakes Hotel

Developer: MV Ventures
Location: Eagan

The Wilf family, which owns the Minnesota Vikings, made their money in real estate but have not done much development in Minnesota until Viking Lakes began taking shape on a 200-acre site in Eagan. The Omni Viking Lakes Hotel, the latest piece of the picture, is currently under construction and slated to open on Oct. 1. It will have 320 rooms and 25,000 square feet of conference space. The city of Eagan approved the site for a mind-boggling 3.2 million square feet of development. The plan includes approximately one million square feet of office space and 1,000 residential units on the site. Two of the apartment buildings with a combined 261 units are slated to start construction at the beginning of April. As for the commercial space, John McCarthy, senior managing director of the Minneapolis office of New York-based Newmark Knight Frank, says, “Right now we’re letting the market drive what is needed.”