By Deb Carlson, Director
Minneapolis-St. Paul is an undeniably cool retail location no matter your shopping preference or style. On the side of the cutting edge, there’s the North Loop and Lowertown. If luxury and sophistication are where your heart lies, head to 50th and France, the Galleria, Grand Avenue or other top-notch destinations nearby. And of course, history’s on our side: We’re home to Target, the original Dayton’s store, and have the nation’s first enclosed shopping mall, Southdale Center.
Minneapolis-St. Paul has become a place to innovate and excel, especially over the past several years. Retailer Martin Patrick 3, in the heart of the North Loop, has garnered national attention and praise for its creative approach to the shopper experience. Minneapolis poached an acclaimed chef from New York City, Gavin Kaysen, for his Spoon and Stable, which went on to notoriety among foodies the world over.
In St. Paul, the retail experience is bolstered by even more innovation—Downtown alone is home to two popular food halls: Keg & Case and the Seventh Street Food Truck Hall. A former Macy’s has been gutted and reinvented as a new retail attraction including an upper-level hockey rink. Lowertown’s restaurant scene and nightlife are strong, and nearby CHS Field hosts the popular St. Paul Saints baseball team just about a mile from Xcel Energy Center, the Ordway Theatre, the Minnesota Science Museum and other popular attractions which bring in visitors by the thousands.
So what keeps the Twin Cities for the hottest new retailers and cool concepts? The area has long been a favorite home-base for large corporations, and counts 18 Fortune 500 companies (and the nation’s largest private company, Cargill) among its ranks. The Twin Cities are home to six professional sports teams and thirteen colleges and universities, including a major Division I program at The University of Minnesota. The area boasts more new professional sports venues than any other U.S. city, as well as the world’s largest skyway system, and is second to only New York City in number of theater seats per capita in the country.
The outlook remains positive for Twin Cities’ retail—Vacancy remained steady at 8.3 percent at the end of the second quarter, according to Cushman & Wakefield Compass data. That number will rise with vacancies created by retailers such as Sears and Herbergers, but those vacancies were expected and are almost exclusively located in strong retail thoroughfares. We expect solid activity on the majority, and have heard from landlords that they are willing to invest in demising plans that may attract activity from junior box retailers.
Even in the face of some bricks-and-mortar closures in the headlines, demand for new and appealing space remains hot in the Twin Cities. It will be exciting to see what else is coming our way the rest of the year and into 2019.
To check out Cushman & Wakefield’s Cool Streets: Minneapolis-St. Paul video, click here. And keep an eye out for the full Cool Streets 2.0 report, due out later this fall!
Deb Carlson is a director specializing in retail brokerage in the Minneapolis-St. Paul office of Cushman & Wakefield. She works with both landlords and retailers to create value in their real estate investment strategies. Deb has been active in the Twin Cities retail community, serving as President of the Minnesota Shopping Center Association, and has been active as a broker for more than 15 years.