Decades-old Golden Valley office building attracts tenants with new amenities

Instead of heading home after finishing work this past Thursday evening, a group of colleagues mingled in their office building.

The extra hours at work weren't on the clock, though. The group just conveniently didn't have to leave the renovated Colonnade building in Golden Valley to have happy hour at a golf simulator.

Adding a bar and a place to practice swings were just a few of the renovations owners Eagle Ridge Partners and BLG Capital Advisors made in an effort to attract and retain tenants despite the prevalence of hybrid work.

"The goal is to lease," said Betsy Vohs, the designer. "We want a really quality solution that works. It is not just architecture for the sake of architecture. If no one wants to lease here, what is the point?"

This year, vacancy rates in Twin Cities office buildings reached 14.8% overall and 11.5% along the I-394 corridor where the Colonnade sits, according to data from Colliers, a commercial real estate services firm. The Colonnade building tells a different story, though.

The 355,000-square-foot suburban office space underwent $5 million of renovations in recent months. Now, the building boasts an occupancy rate of 99%, per the owners, and managed to attract and maintain tenants at unprecedented rates.

"Before COVID, you could get away with not investing in your building, and location alone might get leases signed," said Caroline Heinlein, a senior director with Eagle Ridge Partners. "Post-COVID, employers are looking at their office space more critically and how the building's common areas and amenities can attract their employees back."

For Heinlein and Lisa Peterson, who also serves as a senior director at Eagle Ridge, investing in renovating the building was a necessary part of reducing the risk of high vacancy rates.

Realizing it was time to renovate, Heinlein and Peterson decided to hire Vohs, a designer, architect, founder and CEO of design firm Studio BV.

"The building was built in the late [19]80s," Vohs said. "The building was in good shape, but the design inside was still left over from the late '80s. It hadn't been touched since we renovated it."

Prior to renovations, the main lobby and atrium consisted of a large water fountain that spanned the entire atrium and floor-to-ceiling pink granite tiling. Today, only the floors still sport the pink tiles, and in place of the "very loud" water feature, Vohs said, there are tables, chairs and couches for sitting, working or socializing.

"In a hybrid landscape, especially in the Twin Cities where the unemployment rate is so low, people want more than their office space," Vohs said. "... They want a space that feels desirable where they can meet for coffee or meet up with their team. They want more."

The Colonnade also features a tenant-only lounge and workspace as well as an outdoor patio. Tenants can reserve the spaces and host events for free.

Marc Flanders, a senior vice president and commercial banker at Bell Bank, has been one of the tenants in the Colonnade for more than a decade. He was one of those hanging out after hours Thursday and said he views the renovations of the Colonnade as part of a larger trend in the commercial real estate market.

"It is really nice to be able to host an event within the building, and there is also free parking adjacent to the building, which is key," Flanders said. "There were a lot of upgrades made to the building, and it lightened up the building quite a bit.

"More people are returning to the building, and people like to have a place to host and get together with coworkers without having to leave the space."