Will Hotel Sale Bring Additional Changes to Midtown Exchange?
After approximately two years on the market, the sale of the Sheraton Midtown Hotel was announced in late November, but at a price substantially below the asking price.
The contract, for $9.99 million, was to a Qatar-based real estate affiliate of Al Qamra Holding Group, although the listing price of the property was $15.3 million when marketing efforts began in 2014, according to Minneapolis/St. Paul Business Journal. And the sale comes with strings: a $2 million plus renovation is required under separate licensing agreement with Marriott International, the "custodian" of the Sheraton brand.
What Does This Mean for Minneapolis?
Does this bode well for other high-profile commercial projects in Minneapolis in 2017?
Are additional changes in store for the area around the Midtown Exchange?
Perhaps only time will tell, but the history is interesting and right now the future looks promising. Built by Ryan Cos. US as part of a Midtown Redevelopment Project in conjunction with the city of Minneapolis, the 136-room hotel, which also includes a restaurant and five meeting rooms, was completed in December 2005. It was valued upon opening at $17 million.
Since then, it has been managed by Wischermann Partners of Minnetonka, reportedly generating $5.2 million in revenue last year, with a 66% occupancy rate. The hotel is connected by skywalk to the largest hospital in the state, Abbott Northwestern, as well as to the corporate headquarters of Allina Health, located within the Midtown Exchange building. It is also convenient to downtown Minneapolis and to the University of Minnesota.
Redevelopment & Preservation Efforts
The Midtown Exchange renovation project, a massive mixed use redevelopment effort at the historic Art Deco Sears complex, was completed in 2006 through joint public/private efforts. It currently offers 11 floors of apartments and condominiums, more than 400,000 square feet of office space, 12,000 square feet of retail and service space and the Midtown Global Market, and a thriving public market and restaurant complex with arts spaces and business incubator.
Redevelopment efforts spawned adjacent townhouse development adjacent to the building and today the area is thriving. Redevelopment has been cited as a major success, even though the Sears building stood vacant for 11 years after the location was closed in 1994. The city acquired the property in 2001. Today, leasable space available in Midtown Exchange is second only to the commercial space of Mall of America. Located in the Midtown Phillips neighborhood, tenants and residents have access to the Midtown Greenway, and the Midway Exchange is listed on the National Register of Historic Places.
Ryan Cos. received national recognition for its part in preserving the historic building. The former Sears warehouse and distribution center has a near twin in Boston, also converted to modern uses, and it is one of several former Sears facilities enjoying a rebirth in cities across the country.