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Target Already Out Of Room In Their New HQ

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Nice pics & good news for downtown Minneapolis. They could use some help with the vacancy rate (as could just about every other major city).

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Target to lease 212,000 square feet downtown, room for 1,000 workers

Scott D. Smith

Staff reporter

Target Corp. is quickly becoming downtown Minneapolis' job-growth engine, and the motor is revving.

The retail giant has inked a deal to lease about 212,000 square feet of office space, or about eight floors, in the 1.1 million-square-foot 33 South Sixth building, formerly known as Multifoods Tower. That amount of office space typically would house about 1,000 office employees.

Betsy Buckley, spokeswoman for New York-based Brookfield Properties Corp., which owns 33 South Sixth, said Target expects to start moving employees into the space within three months. As part of the transaction, Target will occupy about 20,000 square feet of former retail space in the attached City Center.

Target's lease runs for at least five years, Buckley said. She declined to specify the number or type of Target employees that would move into the offices. Target could not be reached for comment.

The deal marks the third time this year that Target has leased more space downtown, even though it opened its newly built headquarters on Nicollet Mall two years ago in June. In the spring, Target signed a lease for about 100,000 square feet in 33 South Sixth, the same building the company nearly filled as its headquarters before moving to its new digs.

In August, the company signed a deal for about 43,500 square feet of space at the Retek on the Mall building, 50 10th St. S., to accommodate growth and employees housed in the Marshall Field's building, which it no longer owns.

Largest employer

The need for extra room cements Target's position as the largest employer in downtown Minneapolis. It had more than 9,000 workers downtown before Target's sale of the Marshall Field's department store chain this year. (Few, if any, Field's headquarters workers lost their jobs, but they're now employed by the new owner, The May Department Stores Co., St. Louis.)

"This is great news for downtown," said Minneapolis Downtown Council President Sam Grabarski. "Target Corp. has expanded into almost as much space as they left when they moved into their new headquarters."

Target never completely left 33 South Sixth, keeping about 500,000 square feet there after its move to the new 1.8 million-square-foot headquarters, called Target Plaza, which includes two towers.

Now, with Target reclaiming about 300,000 square feet at 33 South Sixth, it's close to the approximately 750,000 square feet of space it was leasing in the building a few years ago.

The news marks a significant turnaround for the building. Without Target, its occupancy future looked grim. Its owner, Brookfield, faced the daunting task of filling about a half-million square feet of space during an economic recession and a downtown office-space glut. But with Target's growth, and the addition of law firm Rider Bennett, the building is 93 percent leased, Buckley said.

Grocery growth?

Sung Won Sohn, chief economist with Wells Fargo, said the addition of possibly 1,000 employers to downtown Minneapolis will have a significant effect. "The Target chain is one of the most rapidly growing retail chains in the world, so it stands to reason that they need more employees at headquarters to maintain that growth."

Target also needs more front-office employees as it opens more SuperTargets, which sell groceries in addition to general merchandise, said George Rosenbaum, chairman of Chicago-based retail research firm Leo J. Shapiro & Associates.

Rosenbaum suspects Target's need for employees with grocery expertise is the biggest factor driving corporate employee growth. The company has grown from about 40 or 50 SuperTargets to about 200 in the last couple of years, he said.

Target's aggressive marketing tactics and willingness to localize its product mix to particular markets also creates a need for front-office employees, he said.

"As you move away from a standard cookie-cutter approach ... that requires more people."

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Yes. It's across the street from the IDS Tower. It's a bank of sorts, owned by Minnesota Twins owner, Carl Pohlad.

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