Real estate insiders on Tuesday agreed “the jury is still out” on whether the workforce of the future is driving a trend for companies to migrate back downtown.
In January, TCF Bank completed its relocation of corporate employees to the Plymouth Corporate Center at 1405 Xenium Lane in Plymouth. About 1,700 staff previously scattered across seven different buildings across the metro — including the TCF Tower in downtown Minneapolis — made the move. (Staff photo: Bill Klotz)
But two corporate real estate executives from TCF Bank and UnitedHealth Group, who served as panelists at the NAIOP Minnesota event in Golden Valley, provided firstperson assessments of the advantages their companies have seen in setting up shop in the suburbs.
They cited parking and opportunity for onsite growth as two major factors.
TCF Bank recently completed its relocation of about 1,700 corporate employees from seven sites around the metro into the Plymouth Corporate Center along the southeast quadrant of Interstate 494 and County Road 6.
A large percentage of that workforce worked for many years at the TCF Tower in downtown Minneapolis. But an internal survey of corporate employees before the company’s 2014 decision to move to Plymouth helped influence its siteselection process and redesign of the newly leased west metro office space, said Michelle Schmitt, vice president for corporate real estate at TCF Bank.
“Management looked at the bigger picture for retaining and attracting talent,” said Schmitt. “In Plymouth Corporate Center we found that it offered the ability to not only combine employees from seven different buildings under one roof, but we could also bring different product types we have into one site — and that offers more opportunity for collaboration.”
TCF has a 10year lease for more than half the space in the twostory, 635,000squarefoot building at 1405 Xenium Lane. Originally constructed in 1974, the building was renovated last year for its new anchor tenant. Newly enhanced workspaces have increased efficiency and collaboration across business lines, Schmitt said.
A similar idea was involved when UnitedHealth Group began designing its new Optum campus in Eden Prairie in 2012, said Restor Johnson, vice president of real estate services for the health care company.
In 2015, UnitedHealth completed construction of the 15story tower and two adjoining eightstory buildings on a campus that features 6,000 parking stalls for its Optum health services division employees. While that seems like a lot of office space and parking, UnitedHealth envisioned the $95.5 project with efficiency in mind, Johnson said.
“If there was an ‘aha’ moment (with the Optum campus project) it has really just been the power of bringing people together in a contemporary working environment,” Johnson said. “And the impact that has had on the culture and productivity and energy level was something we just didn’t see before when we were in a number of buildings scattered throughout the Twin Cities.”
The fact that the new campus is near one of the proposed light rail transit stations along the future Southwest line is a “bonus,” but didn’t make or break the site selection, Johnson said.
“Many people are going to continue to drive in” to work, Johnson said. “The question of ‘where will they park, how much will it cost and who pays for it’ is probably more urgent for us than just the benefit — which is clear, there is no denying it — of being close to mass transit.”
Despite the fact that UnitedHealth Group chose to build new for its Optum division, the rising cost of construction has driven more developers and owners to consider adaptive reuse of existing buildings, said Tom Shaver, of Inland Development Partners, who served as moderator.
“We are seeing a lot of buildings being retrofitted for a different use, especially in places like the North Loop,” Shaver said. “It’s something that, given the cost of construction, has become a viable alternative.”
But whether millennials and future generations of employees will be drawn to urban working environments over suburban locations has yet to be determined, said Vik Bangia, managing principal for Verum Consulting, also a panelist at the discussion.
“The jury is still out on that,” Bangia said. “There’s certainly somewhat of a trend toward urban living and working.” Whether it’s a lasting trend, “I think we will see that play out over the next 10 to 15 years,” he added.