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High vacancies? Sluggish leasing activity? Not at Minneapolis’ SPS Tower

By Dan Rafter, Editor

The office sector continues to struggle. But that doesn’t mean that all office properties face high vacancies and low levels of leasing activity. High-quality, Class-A space with full amenities packages? They continue to attract tenants.

Just look at SPS Tower, a 655,070-square-foot Class-A office building in downtown Minneapolis.

This tower notched 52,540 square feet of leasing activity recently, with three existing tenants either renewing or expanding their leases. The tower, owned

Paving the way for

by Sumitomo Corporation, now boasts an occupancy rate of 72%. This ranks among the highest occupancy rates for a downtown Minneapolis office building.

What’s behind the success? It starts with quality.

The flight to quality is real, as tenants increasingly seek space in higher-end, Class-A office properties. Many of these tenants are leasing smaller amounts of space but paying more per square foot for it.

SPS Tower fits in that definition of higher-quality, Class-A space. It also boasts amenities that make the

building attractive to tenants who are trying to bring their employees back to the office on at least a parttime basis.

Jim Montez, vice president of agency leasing with Transwestern’s Minneapolis office, handles leasing for SPS Tower. He said that the property is benefitting from the flight-to-quality movement.

“The success starts with a great team,” Montez said. “It always starts there. That includes the ownership group. The building has an amazing owner, one of the Vacancies to page 12

future generation of leaders: Murnane stepping down as head of Minneapolis’ Opus

By Dan Rafter, Editor

It’s time to let the next generation of leadership step up. That’s why Tim Murnane, the long-time president and chief executive officer of Minnetonka, Minnesota-based Opus, announced his retirement late last month.

Murnane, who will have served 15 years in his leadership role as of the date of his retirement, said

that Opus, one of the busiest development, design and construction companies in the Minneapolis area, boasts a talented roster of talent. It was time to tap these professionals to lead the firm, he said.

“At Opus, we’ve always focused on succession planning and making sure we have great leaders identified early on. We’ve always provided these leaders with

the tools and resources that they need,” Murnane said. “There’s nothing magical about having a 15-year term. But that is a long time for a CEO. It’s the right time for me to retire personally and the right time to let the next generation of leaders come up.”

The Turf Club at SPS Tower. (Photo courtesy of SPS Tower.)

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CONTENTS July 2025

High vacancies? Sluggish leasing activity? Not at Minneapolis’ SPS Tower:

Paving the way for the future generation of leaders: Murnane stepping down as head of Minneapolis’ Opus: It’s time to let the next generation of leadership step up. That’s why Tim Murnane, the long-time president and chief executive officer of Minnetonka, Minnesota-based Opus, announced his retirement late last month.

Twin Cities hospitality sector continues to dig out of pandemic-fueled doldrums:

It’s 2025, but the effects of the COVID pandemic are still hitting the Minneapolis-St. Paul hospitality sector.

Expect retailers to quickly gobble up space left by Party City, Big Lots and other big-name closures: It sounds alarming: For the first time in 16 quarters, U.S. retailers in the first quarter of this year vacated more space than they leased.

Closing the resident services gap to stand out in a renter’s market:

Wealth on the water: Retail and office space on the waterfront outperforming the rest of the commercial market in the Twin Cities region:

Minnesotans love the water. But how does proximity to lakes impact retail and office properties?

President | Publisher Jeff Johnson jeff.johnson@rejournals.com

Managing Editor Dan Rafter drafter@rejournals.com

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Chief Financial Officer Todd Phillips todd.phillips@rejournals.com

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Wealth on the water: Retail and office space on the waterfront outperforming the rest of the commercial market in the Twin Cities region

By Dan Rafter, Editor

7767 Elm Creek Boulevard, Suite 210 Maple Grove, MN 55369

Minnesotans love the water, flocking to lakeside towns, resorts, cabins and second homes throughout the year. But how does proximity to lakes impact retail properties? According to the latest research from Colliers, retail properties located on lakefront property boast greater foot traffic and, not surprisingly, a bump in sales.

In its June 2025 Research Reveals report, Colliers said that lakefront retail properties outperform other retail spaces when it comes to asking rents and vacancy rates.

In its report, Colliers looked at retail properties in the Minneapolis-St. Paul metropolitan area, defining properties that are located within 600 feet of a shoreline as waterfront spaces.

Colliers, then, looked at almost 100 waterfront retail properties of more than 10,000 square feet in its inventory. This inventory accounts for 1.9 million square feet of retail real estate. This accounts for almost 2% of the total retail inventory in the Minneapolis-St. Paul metro area.

The results of Colliers’ research? The company found that waterfront retail properties boast the highest asking rental rates and lowest vacancy rates on the market. The reasons for this are not surprising: Waterfront retail offers scenery and views to their clients that other retailers can’t provide.

As of the end of the first quarter of 2025, the vacancy rate for waterfront retail properties stood at 1.9% in the Minneapolis-St. Paul metropolitan area. That is an all-time low, and is less than half of the market-wide retail vacancy rate of 5.6% as of the end of the first quarter.

Because the vacancy rate for this space is so low, retailers looking for waterfront property can expect to pay higher rents. Colliers said that the asking rate as of the end of the first quarter of this year for waterfront retail space

stood at $23.18 a square foot. That is 23.8% more than the market average of $18.73 a square foot as of the end of the first quarter of this year.

But retail isn’t the only sector in which waterfront property is outperforming the market. In its Research Reveals report, Colliers also found that waterfront office outperforms other office space throughout the Minneapolis-St. Paul metropolitan market.

According to Colliers, waterfront office properties account for more than 3 million square feet of competitive office real estate in the Twin Cities area. In the Class-B end of the sector, 5.2% of the office inventory in the Minneapolis-St. Paul office sector sits on a waterfront.

Colliers only considered Class-B office properties in its report because there are not enough Class-A waterfront office properties in the Twin Cities area to be statistically significant. This means that Class-A office properties such as Normandale Lake Office Park, Centennial Lakes and the Lakeside Center have been excluded from Colliers’ report.

As of the end of the first quarter of 2025, the vacancy rate of Minneapolis-St. Paul waterfront Class-B office properties stood at 23.5%. That’s lower than the overall Class-B office space vacancy rate of 25.9% as of the end of the same quarter.

The asking rent for Class-B waterfront office properties came in at $31.64 a square foot as of the end of the first quarter of this year, up from an average of $29.41 a square foot for Class-B office space in the Twin Cities region overall. Class-B waterfront office properties are 7.6% higher on average than their non-waterfront-based competing spaces.

Image by Enrique from Pixabay

Twin Cities hospitality sector continues to dig out of pandemicfueled doldrums

By Dan Rafter, Editor

It’s 2025, but the effects of the COVID pandemic are still hitting the Minneapolis-St. Paul hospitality sector.

How so? In its 2025 Minneapolis-St. Paul Metro Area Hospitality Investment Forecast, Marcus & Millichap reported that fewer than 250 hotel rooms were under construction as of the start of 2025. That is the lowest hotel development pipeline since 2010.

And while Marcus & Millichap reported that hotel occupancy rates in the Twin Cities area are projected to rise for the sixth consecutive year, these rates will still rank below pre-pandemic levels.

According to the report, occupancy throughout the metro area is expected to hit 59.4% as of the end of this year. While that is an improvement, it’s not as strong as the levels hotel operators saw before the COVID-19 pandemic hit in 2020.

The report, though, is largely a positive one, as the local hotel industry, despite challenges, is in the middle of what Marcus & Millichap calls a recovery period.

“Despite below pre-pandemic occupancy levels, the Twin Cities hospitality sector is showing signs of a steady, demand-driven rebound supported by limited new supply and record ADR,” said Todd Lindblom, first

vice president and regional manager with Marcus & Millichap.

Marcus & Millichap also reported that the average daily rate for hotel rooms in the metropolitan area is expected to hit a record-high of $136.18 in 2025. This higher ADR will be fueled by upper-scale hotels that are expected to boast a higher occupancy rate of 62.3%.

RevPAR, or revenue per available room, is expected to increase at a more moderate pace, though. Marcus & Millichap said that average RevPAR is expected to increase to $80.92 in the Minneapolis-St. Paul market this year. If this happens, that would be the highest this figure has been since 2019, before the pandemic.

Downtown Minneapolis is expected to lead the area’s RevPAR gains.

Marcus & Millichap said, too, that investment sentiment remains optimistic in this sector, with average room prices in the Twin Cities area climbing 20% on a year-over-year basis. In addition, a cap rate of 10.4% will position the Twin Cities metropolitan area as an attractive market to investors seeking higher yields, the company’s report said.

“This year’s constrained development pipeline, coupled with improving fundamentals and new urban projects like Upper Harbor Terminal, positions the Twin Cities market for cautious yet promising growth,” said Lindblom.

BUILDINGS ARE COOL

Image by Jan Claus from Pixabay.

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JLL’s Naveen Jaggi: Expect retailers to quickly gobble up space left by Party City, Big Lots and other

closures

by Dan Rafter, Editor

It sounds alarming: For the first time in 16 quarters, U.S. retailers in the first quarter of this year vacated more space than they leased.

That is one of the key findings of JLL’s recently released Q1 Retail Research Outlook, which looks at the state of the U.S. retail sector during the first quarter of 2025.

Other findings seem troubling, too: Net absorption in the U.S. retail sector sunk to negative 2.7 million square feet in the first quarter, JLL reported. And announced retail closures from 2024 through early 2025 totaled more than 9,900 locations, driven by store closings from struggling retailers such as Party City and Big Lots.

But the retail news isn’t all bad. It’s not even mostly bad. As JLL reported, these retail closures put millions of high-demand retail square footage back into the market for the second quarter of this year and beyond. Naveen Jaggi, president of retail advisory services with JLL, said that this bodes well for the future of the retail market: He expects leasing activity to rise as more companies seek out high-quality retail space that is now hitting the market.

We spoke with Jaggi about JLL’s report and the state of the retail market. Here is what he said.

Why is so much retail space being vacated today? Is it surprising that retailers vacated more space than they leased in the first quarter?

Naveen Jaggi: This was the result of two to three years of build-up from retailers that have been on the watch list of bankruptcies. We have been anticipating these closures for some time. They were nothing that took us by surprise. No one was surprised that Joann closed. Everyone was expecting it. It just seems more shocking when all these expected closures happen at the same time.

Most of the space being left by these retailers will be in high demand. The space will be taken up quick-

Image by Pexels from Pixabay

JLL to page 11

Closing the resident services gap to stand out in a renter’s market

By Adam Feinstein, VP of Product, AppFolio

Today’s rental market is pushing property managers to shift their priorities significantly to remain competitive. Multifamily vacancies have risen to 6.3%, the highest levels we’ve seen since 2011—even including the early days of the COVID-19 pandemic. It’s no surprise, then, that maintaining occupancy rates is now the top threat property managers say they face.

In a competitive market, resident experience is more important than ever to attract new residents and drive retention. Modern consumer technology has evolved renter expectations, and property managers need to think differently to satisfy new and current residents.

New data from AppFolio’s 2025 Renter Preferences Report sheds light on an overlooked way to stand out and delight renters: closing the resident services gap. According to the report, the demand for residential services, such as onboarding services and digital experiences, far exceeds the current availability. Let’s explore this gap in available resident services and how property managers can elevate their resident experience to close it.

The Modern Rental Landscape

During the pandemic, the demand for renting was significant. With rental interest so high, property managers were able to focus on top-of-funnel efforts, like promoting listings and engaging through social media, to bring in new residents.

Now, move-in trends have changed, with rental vacancies approaching a 15-year high. Meanwhile, the number of new units available for leasing has continued to climb, expected to cap out at more than 600,000 units in 2025, which is slightly more than in 2024.

Top-of-funnel tactics are no longer enough to offset this dramatic shift. Property managers’ top concern is maintaining occupancy rates, and when it comes to occupancy, current renter satisfaction creates a massive ripple effect.

According to the 2025 Renter Preferences Report, satisfied renters are 71% more likely to renew their lease and over five times more likely to recommend their property manager. To focus their efforts on occupancy, property managers need to shift from a de-

mand mindset to an experience mindset—to deliver a first-class experience to the residents they have while differentiating themselves to prospective renters.

But what do renters want their ideal rental experience to look like?

The Resident Services Gap

The demand for several resident services that renters prioritize far exceeds their current availability:

• Over three-quarters of renters find it important to have an online resident portal or mobile app, but only 57% said they have one

• 71% place importance on benefit packages or bundled add-on services, while only 42% have these

• 61% find smart home technology important, while only 45% have it in their units

• 60% of those who have received digital move-in services found them important, but only 38% had them available

Beyond the significant delta between high-importance services and their availability, it’s worth noting that Gen Z places the greatest importance on these

Image by Michael Pointner from Pixabay.

ly. The headlines, though, are all about a lot of retail space coming to the market by bankruptcy.

Despite these high-profile bankruptcies, the retail sector is resilient today, right?

Jaggi: Retail has been resilient in part because we have a historic low of new construction activity in this sector. We have had multiple years of lower-than-average retail construction. There is a demand for quality space and markets. You must create supply one way or another. Sometimes it means that you work tenants out of spaces that are old and dying. We are in that environment now. When dying companies put space back on the market, it helps fill the demand by retailers that are growing.

What kind of retailers are performing well today?

Jaggi: Value-oriented daily needs retailers are the biggest players today. Places like Dollar General, Burlington, Dollar Tree are aggressive players. Ross Dress for Less is doing well. Retailers that play in that value daily needs space are taking quality space. We are seeing the U.S. consumer looking for ways to stretch their dollars. More players are in that space to meet that demand from consumers.

There is an entire sector of consumers who look for quality products at stores like T.J. Maxx or DSW at a value price. That is a financial demographic that wasn’t nearly as strong 10 or 15 years ago.

How about experiential retail? Is that still in demand?

Jaggi: Every retailer has realized that providing an experience is important. You must give the consumer

a better experience, whether you are talking about a grocery store like grocery like Sprouts or a store like T.J. Maxx. Retailers have to give consumers a reason to come into their stores.

We are seeing more retail that combines food with entertainment, such as Punch Bowl Social in Chicago, which combines food with bocce ball, bowling and other entertainment. There are also places like The Color Factory, which provide an immersive art experience.

The U.S. consumer is attracted to those concepts. But for some of these, the verdict is still out on whether they will have long-term success. What we haven’t seen yet is whether these concepts have 10-year legs. We haven’t seen whether these concepts will reach 10 years or not. The true tale will be in 2030 when we see if these retailers will sign extensions. Are they only good concepts for a short period?

Was there anything in JLL’s first quarter retail report that surprised you?

Jaggi: Nothing took us by surprise. The broader comment I’d make, though, is that we can’t take the U.S. consumer for granted. The U.S. consumers can only take so many negative headlines, so many shocks before they start to retreat a bit. We are in an environment now in which U.S. consumers need some stable news. If consumers feel uneasiness in the marketplace, they will pull back on their spending. The one thing we don’t know is how resilient consumers will be over time in an environment in which you have bad news atop of bad news.

Employment is strong. The labor market feels strong. Wages feel strong. The equities market is back to a healthy level. Yet there is continual talk of whether

they’ll be a war or whether we’ll have high tariffs or low tariffs. These things make it hard for consumers to want to shop. Many will look for places where they can find items and not face sticker shock.

Is the threat of tariffs have any impact on retailers?

Jaggi: Tariffs are not slowing retailers yet. But it’s important that we don’t let the headlines distract us from the fact that retail is a long-term outlook business. In the long term, things are good. There is no sense that tariffs will be in place forever. Retailers are saying that it’s important not to overreact to tariffs.

Retailers learned important lessons during the pandemic. They have diversified their supply chains. They can go from Peru to Bangladesh to Vietnam or China to see where pricing is least exposed to tariffs. That is where retailers are focusing their energy.

When you go shopping, look at the products on the shelves. Look at where they are made. Five, six years ago so much of it would have been made in China. If you look today, it is very diversified. Athletic shoes are still predominantly made in China. Other than that, there is a greater diversification of where products are made. I was in Houston a week ago and I saw Izod polo shirts that were made in Peru.

We were at the International Council of Shopping Centers Las Vegas recently. I was pleasantly surprised when talking to people to learn that most retailers are not overreacting to tariff talk. Retailers are not changing their behavior now based on a short-term conversation on tariffs. That was a pleasant outcome, not seeing any overreaction.

24 th Annual

Vacancies

from page 1

best I’ve worked for in a long career. The property management team has been in place for many years. The general manager, too. The staff is fantastic. Then you add in the building’s great design and architecture and the strength of the marketing partners, and you build this whole ecosystem that leads to success.”

It’s helped, too, that SPS Tower went through a significant renovation in 2024. That $8 million project included five spec suites with an adjoining two-story tenant lounge on the building’s 19th floor. The renovation also included new furniture, skyway space for new tenant FGMNT Coffee and updates to the lighting on the first floor and skyway levels.

One of the more popular additions to SPS Tower is the Turf Club, which ranks as the largest lawn in downtown Minneapolis. This 6,000-square-foot putting green and adjacent entertainment space is a busy gathering place for both building tenants and professional groups. This space also features two bocce ball courts.

“The goal was to transform this building into a workplace for all seasons and all people,” Montez said. “During this renovation, we tried to be mindful of what the building is and what it has been.”

The all-seasons approach is what spurred the addition of the large green space outside the tower. In addition, SPS Tower features a variety of programming and activities year round, including live music and regular visits from food trucks.

The focus on quality has paid off. Montez said that SPS Tower boasts six tenants that have been in the building for more than three decades. Tenants stay in SPS Tower an average of 17 years, Montez said.

“We are doing something right,” he said. “People don’t want to leave. We are not giving them any reason to leave.”

The amenities of SPS Tower play a key role in the building’s success in attracting and retaining clients. With many employees still working from home at least on a part-time basis, such amenities are a key tool for companies that want to encourage their workers to return to the office at least two or three days a week.

And once more employees start returning to the office? That could start a chain reaction in which other workers return to their office spaces, too.

“We still haven’t quite figured out this new workstyle,” Montez said. “Some people are back in the office on a regular basis. Some are reluctant to come back. How do you provide something for everyone so that everyone feels welcome and accommodated in the office?”

As Montez says, companies are trying to “earn the commute,” make it worthwhile for their employees to return to the office.

This is especially important for downtowns, including downtown Minneapolis and St. Paul. Before COVID, a growing number of employers were moving to office space in the downtown hubs of the Twin Cities. Five

ago,

“The spigot turned off and it turned off hard,” Montez said.

Montez, though, says that companies will again seek office space downtown as they search out the highest-quality office properties, many of which stand in the Twin Cities’ urban core.

years

when COVID hit, that flow of companies to the urban core turned off.

SPS Tower in downtown Minneapolis. (Photo courtesy of Transwestern.)

SPS Tower isn’t the only office building downtown receiving investment and upgrades. As Montez says, several building owners are investing in their properties and updating their buildings’ amenities packages.

“It seems to be working,” he said. “I see more traffic heading into downtown and more people in the Skyway System. I think downtown has turned a corner. I am seeing the office market improving downtown.”

An example of this investment is the money that SPS Tower’s owners have invested in creating individual spec suites ranging in size from 3,000 to 12,000 square feet on two floors that were originally occupied by a law firm. The spec-suite area also boasts tenant lounges and media rooms.

This floor has become a hive of activity in the building. Montez says that he knows of at least three podcasts that are produced out of the area’s media rooms.

“Smaller businesses have a hard time justifying the types of spaces that we can provide in this area,” Montez said. “They don’t need these spaces every day. They might need it when they have clients visiting or to use as a space to where people can blow off steam. It gives building occupants access to a space that they otherwise would not have access to. When you have a shared space like that, it creates human interaction. People are social. They strive for that human connection. A space like this gives them that opportunity.”

A spec suite at SPS Tower. (Photo courtesy of BV and Corey Gaffer Photography.)

from page 1

One of those leaders? Matt Rauenhorst, who currently serves as president and chief executive officer of Opus Development Company. The members of Opus’ board of directors selected Rauenhorst to fill Murnane’s role as president and chief executive officer of Opus once Murnane leaves the post.

That won’t be coming too soon. Murnane will work in his current role through the end of 2026. This means that when this industry veteran retires, he will have spent 38 years at Opus and 46 years in the commercial real estate industry.

Phil Cattanach, formerly of Opus, will return to the company to take over the role of president and chief executive officer of Opus Development Company upon Rauenhorst’s move to his new role.

Murnane said that Rauenhorst is the right person to take over his role. Murnane said that Opus began considering people to fill the role of chief executive officer and president five-and-a-half years ago. This included hiring an outside consultant to evaluate the options.

The consensus? Rauenhorst was the best person for the job.

“I have worked with Matt for more than 20 years. I’ve gotten to see him grow as a leader,” Murnane said. “Matt was the successor who made the most sense. Matt is ready for this position.”

Rauenhorst said that he appreciates the opportunity to work with Murnane during the next 18 months to learn the intricacies of the job he’ll be taking over.

“I appreciate the thoughtfulness that went into this decision,” Rauenhorst said. “What an incredible opportunity and gift to have that overlap with Tim of 18 months. That is a great benefit for me and for Opus. This is a longer transition than you’d normally see. But it will benefit the overall organization.”

Rauenhorst is happy, too, to see Cattanach return to Opus. Rauenhorst said that Cattanach, too, is a talented leader and developer, and his return will provide another boost to Opus.

Continuity

The succession plan continues Opus’ long history of retaining its talented workers for many years. Murnane might log 38 years with the company by the time he retires. But that won’t even make him the longest tenured employee at the company. There are some employees who have worked for the company for more than four decades.

Murnane said that Opus has always given talented people the chance to build a great career.

“That’s one of the things that’s so special about the culture here,” Murnane said. “The leaders at Opus have always believed in giving smart people the chance to succeed or fail. That is empowering to an associate, especially someone who is, say, 25 or 26. They are given a tremendous amount of authority and

Opus to page 16

Opus has unveiled plans for a new headquarters building that will rise in Edina, Minnesota. (Photo courtesy of Opus.)

Matt Rauenhorst (Photo courtesy of Opus.)

services, emphasizing the changing expectations of a new generation of renters. Gen Z is the only generational group of renters that is actively growing and will be the single largest group of renters by 2030.

Not only are these services important to residents, but 79% of residents are willing to pay for at least one resident service through their property manager, including Internet, renters insurance, a renter rewards program and pest control.

Closing the Resident Services Gap

In this renter’s market, differentiation is key. And the smartest way to stand apart is by offering a high-quality experience that delivers what residents are looking for—but aren’t getting.

One of the greatest pain points for renters is the move-in process, making it a prime opportunity for property managers to set themselves apart. Seventy-five percent of residents experience challenges with moving in, and modern services can make it much smoother.

Only 38% of residents have digital move-in services available, while 81% who’ve used them found them helpful. With such a large portion of residents struggling with moving in and such a low number of resi-

dents with digital move-in services currently available, making these services accessible should be a top priority for property managers.

The other prominent opportunity for property managers to improve the experience of their current residents and attract new ones is digitization. Aside from move-in services, the most important resident needs with large deficits in availability are having a resident portal or mobile app, and smart home technology.

Especially as younger generations continue to take over the rental market, expectations for a progressively digitized resident experience are increasing. Offering digital services like a resident portal, mobile app, and smart home technology in units creates more renter-friendly experiences and empowers residents to manage their rental needs with the touch of a button.

Adam Feinstein, is vice president of product for AppFolio.

Adam Feinstein (Photo courtesy of AppFolio.)

responsibility to run a project. That is empowering, and it inspires people to stay with us.

“It’s not just a job here,” Murnane said. “People appreciate the culture and core values that our founder embedded here.”

As Rauenhorst says, commercial real estate is a cyclical business. This means that Opus’ business strategies must evolve over time to meet the challenges of working in this field.

But what doesn’t change? Opus’ core values.

“Who we are, our culture and core values have been consistent for 70-plus years,” Rauenhorst said. “Tim has been powerful in helping to lead that. Innovation, safety and leadership are key components of our culture. Our associates want to be here for a long time. They feel good about the organization in which they are working.”

Long-term success

Gerald Rauenhorst founded Opus, originally named Rauenhorst Construction Company, in 1953. That means that Opus has been a fixture in the Twin Cities area for more than 70 years.

Opus has gone through a lot of up and down commercial real estate cycles. How has the company managed to thrive for so long?

Murnane said that Opus’ leaders have long spotted opportunities early in new cycles. This was evident during the recession of 2008 and 2009, a time in which every commercial real estate firm was hit hard.

Opus’ leaders rebuilt the company following this recession, focusing on providing the top customer service and building the highest-quality properties. The company also expanded into new geographic markets.

Opus has also been nimble enough to focus on commercial sectors that are thriving. In the 1990s and 2000s, Opus became one of the biggest developers of office properties. The company also built plenty of retail when that sector was growing.

During the last 15 years? Opus has focused on the industrial and multifamily markets, both sectors that have been booming during this time.

Opus restructured in 2010. The company kept its high-performing Midwest offices but added locations in higher-growth markets such as Phoenix, Denver and Austin, Texas.

“The strategy has been to stay focused on the primary products that we most experienced in – industrial and multifamily – and focus on geographic markets that are providing the biggest opportunities for

Matt Rauenhorst (Photo courtesy of Opus.)

growth,” Murnane said. “It’s about building in a slow, methodical way.”

Rauenhorst said that another reason for Opus’ success has been the quality of the company’s work.

“The big institutional owners of real estate, whenever they buy buildings from us, they say that Opus has a brand that stands for high quality,” Rauenhorst said. “Whether it’s multifamily, industrial, office or retail, our team has consistently delivered high-quality buildings. That’s a differentiator for our band and part of our long-term success.”

Opus also not only survived COVID but thrived during the pandemic. Part of that was because of the boom in demand for industrial space. Opus was well-positioned to deliver that space for its clients.

Murnane also credited the long-term planning of Opus’ leaders. These leaders had developed a strategic growth plan before COVID. Following the tenants of that plan helped the company navigate the challenges of the pandemic.

“We couldn’t have predicted COVID, but we were fortunate that we had done some planning,” Murnane said. “We were ready to make cuts to expenses. We didn’t hire as many people as we might otherwise have added. We had a road map that helped us anticipate changes in business. Nothing ever goes completely according to plan in commercial development. You need to be responsive, nimble and smart.”

Opus is now planning a new headquarters office in the Twin Cities suburb of Edina. Opus will fill a portion of this new five-story, 112,000-square-foot office building. The building will be a high-quality one with modern finishes and amenities.

“We are fired up about this at Opus,” Rauenhorst said. “It is an incredible site, and we can deliver an A-plus building in a market that needs it. It will be Opus’

future home, but this is a market-driven development. The demand side for Class-A, well-located suburban office is strong. Our site responds well to that demand. We think it will be a well-received building that sets a new bar for what in a post-COVID world a Class-A office building should look like.”

DEVELOPMENT

Opus is building an engineering and product development facility for BAE Systems in Maple Grove, Minnesota. (Photo courtesy of Opus.)