Wells Fargo exiting south Minneapolis home mortgage building, St. Louis Park offices

Wells Fargo plans to sell its massive home mortgage campus just south of downtown Minneapolis, a move that follows the bank's decision to scale back its U.S. home loans business.

The state's second-largest bank will also move out of leased offices in St. Louis Park as it continues to shrink its real estate footprint. The decisions come after a shift in strategy earlier this year that refocused its home-lending business on existing customers rather than winning new ones.

Wells Fargo remains one of the nation's largest mortgage lenders. The Minneapolis home mortgage office — situated on the former Honeywell headquarters site at E. 26th Street — has served as a signpost to downtown since the early 2000s, highly visible to anyone driving on Interstate 35W.

Its sale will reduce Wells Fargo's physical presence in the Twin Cities. San Francisco-based Wells Fargo merged with Minneapolis-based Norwest Bank in 1998. Despite Norwest being the surviving entity of the combined company, the bank retained the better-known Wells Fargo name — as well as its California headquarters.

Wells Fargo says it has no intentions of leaving the Twin Cities area entirely.

"Wells Fargo is committed to the Twin Cities area as an important market and employment center," Laura Oberst, a Twin Cities area market leader for the bank, wrote in a message to employees. "We are confident that bringing teams together in these improved and modernized spaces can help build a culture focused on customers, collaboration, strong risk management and innovation."

The bank notified employees of its plans to relocate workers — starting before summer — to spaces in downtown Minneapolis and Shoreview. Staci Schiller, a company spokeswoman, said the transition should be complete by mid-2024.

The bank laid off hundreds of mortgage bankers in late February. Schiller said that while there have been layoffs in the mortgage division in recent months, this office consolidation isn't a part of that. Instead, she pointed to the bank's multiple office spaces, which are under-utilized.

Like many employers, Wells Fargo moved to a hybrid model for its corporate employees following a period of fully remote work during the pandemic. The company now asks employees to be in the office at least three days a week.

"We want our employees in spaces that are occupied and vibrant," Schiller said, adding that employees also said they want a better in-person experience and the bank plans to upgrade its remaining office spaces. "The way employees work is evolving."

Most of Wells Fargo's noncustomer-facing employees will move to one of four main Twin Cities locations: The bank's three main buildings in downtown Minneapolis and the Shoreview operations center.

Wells Fargo leased its space at Metropoint along Hwy. 169 in St. Louis Park, where demand for high-end office space has been much stronger than it has been in downtown Minneapolis and surrounding neighborhoods. The bank occupies more than half of that 918,000-square-foot office complex.

The home mortgage campus should be an attractive asset for buyers, given the building's amenities and improved interstate access, said Steve Cramer, president of the Minneapolis Downtown Council.

The move will leave a gaping hole in the mostly residential Phillips neighborhood, where Wells' move-in was once looked on as a major redevelopment catalyst. But the consolidation of employees at the company's towers could be good news for a different part of town.

"From a downtown perspective, it really is positive," Cramer said.

Wells Fargo's $300 million 4th Street towers are on the edge of the central business district, where building owners are scrambling to fill space vacated during the pandemic. Earlier this year the office vacancy rate downtown averaged 24%, according to a report from Cushman and Wakefield, a significant improvement from the year before but still above the regional average.

Wells Fargo is already the fourth-largest employer in downtown Minneapolis with 5,500 employees. The bank has not specified how many employees will shift to downtown in this realignment. It sold its vacant downtown Minneapolis operations center last year.

The bank is the latest major Minnesota employer to announce a change to its corporate campus.

Target has moved out of City Center. AT&T is leaving its namesake tower in downtown Minneapolis. In the suburbs, UnitedHealth Group is selling its Minnetonka headquarters, Blue Cross and Blue Shield of Minnesota is departing its Eagan campus and Thomson Reuters is selling most of its Eagan office complex.

"A lot of these larger employers that have a combination of owned and leased real estate are making decisions about how to optimize that real estate at a time when they don't need as much," Cramer said. "In this case it favors downtown, in other cases it favors other locations."