It's hard not to notice the taped-off corridors and the men and women in hard hats and neon vests in the office buildings of downtown Minneapolis and St. Paul these days.
Just as motorists encounter construction on Twin Cities roads in the warmer months, a similar flurry is happening in the cities' most-trafficked office towers.
The office market has changed dramatically in recent years. Tenants are more concerned about amenities and resources in a building rather than how tall it is, said Reed Christianson, a partner at Transwestern.
"It's really about inside-out on a building and not outside-in. … It has to be about what you have in your building," he said.
According to a quarterly report released last month by the local office of Colliers International, the vacancy rate in the Twin Cities office market is 15.3 percent, an increase from 14.5 percent that the firm recorded in the fourth quarter of last year. The direct vacancy rate in the downtown core in Minneapolis is 19.7 percent. Class A buildings, the highest tier in terms of building quality, have a vacancy rate of 12.9 percent, however.
Many buildings are undergoing renovations to add Class A level amenities, attract tenants and lift rental rates.
A new phase of such work recently started on RSM Plaza, the 20-story skyscraper that sits at Nicollet Mall and 8th Street.
In 2015, Chicago real estate investment firm Golub & Co. and Los Angeles-based Oaktree Capital Management purchased the skyscraper for $78.3 million and said they would spend $10 million to renovate it.