Ryan Cos. Plans Another West End Office Tower
The West End area in St. Louis Park continues to defy the general office market slump with strong demand. Just a year after opening, the new 10 West End tower is just about fully leased. Now Minneapolis developer Ryan Cos. is selling it, and planning to build another office tower next door.
Bridge Investment Group paid $117 million for the the 11-story, 343,000-square-foot 10 West End, according to a public filing with the Minnesota Department of Revenue. The Utah-based real estate investment manager already owns several neighboring office properties in the West End area. The addition of 10 West End brings its Minneapolis footprint to more than 1.4 million square feet.
Meanwhile, Ryan Cos. is turning its attention next door to 20 West End, to be built immediately south of 10 West End. “Given the extraordinary leasing activity we’ve experienced, we believe the market is demanding a sister to 10 West End,” said Peter Fitzgerald, vice president of real estate development at Ryan Cos. “While we don’t have a confirmed timeline to share yet, we are actively discussing the project with a number of potential anchor tenants whose commitment will certainly help us solidify financing in a rising interest rate environment.”
Designed for post-pandemic work, 10 West End, which opened in January 2021, features open-air balconies on nearly every floor, high-tech conference rooms equipped for hybrid meetings, and safety features like touchless elevators. The tower is on pace to be 96% occupied by the end of the year, Fitzgerald said.
“Despite a global pandemic and economic headwinds, 10 West End experienced extraordinary leasing success which resulted in stabilized occupancy less than two years after opening,” Fitzgerald said. “We knew it was time to harvest our investment and sell the asset to a longer-term real estate investor like Bridge Investment Group.”
Ryan Cos. sold the building in conjunction with its equity partners The Excelsior Group (TEG) and Sotarra LLC. The group had a long-standing relationship with Bridge dating back to a the sale of West End Office Park in 2020, said Fitzgerald. “The trusted relationship with Bridge Investment Group and their belief in the momentum of the West End neighborhood resulted in a very quick closing.”
Bridge’s Minneapolis portfolio includes the 560,000-square-foot West End Office Park and the 508,000-square-foot Excelsior Crossings office campus in Hopkins. The firm’s national office portfolio totals 13.1 million square feet across 14 states.
“Bridge is continually looking for opportunities in highly desirable markets with strong fundamentals. Minneapolis has been an exciting and active market for us as the flight to quality by office users continues to accelerate,” said Jeff Shaw, CEO of Bridge Commercial Real Estate and senior managing director of Bridge Investment Group.
“Our buildings in West End have continued to generate some of the highest leasing activity in the submarket due to the amazing walkability around the buildings, the quality of the buildings themselves, and the ongoing investment into cultivating the environment that employers are looking for to attract talent.”
More Twin Cities acquisitions could be in the cards for Bridge. “Expansion will be determined by the opportunity that is coming due to the disruption in the office market,” Shaw said. “It would be premature to speculate on future activity in Minneapolis, but it’s safe to assume we’ll continue to be an active player in the market.”