Uptown retail properties amid neighborhood rebound

Editor’s note: On the Market is a regular feature from Finance & Commerce that highlights interesting commercial real estate that has recently been put up for sale. Let us know about CRE that’s on the market at [email protected].

Our New Year’s week On the Market features two retail-oriented properties in Minneapolis’ resurgent Uptown district, where the long-awaited end of a disruptive street reconstruction project and the opening of a new rapid transit line could bring in new business following a pandemic-induced downturn.

The first opportunity on our list is a century-old, recently refurbished building with first-level shops and two floors of office above. The next is a retail condo portfolio spanning most of a well-located building’s ground floor.

Lumen on Lagoon

Lumen on Lagoon is a newer mixed-use development at Emerson and Lagoon avenues near the heart of Uptown. The building boasts several dozen residential condos on floors two through five, plus street-level retail condominiums comprising the bulk of the ground level.

Only the retail condos are included in the sale, offered as a package deal. Grand Real Estate Advisors’ floor plan shows five spaces with four tenants: 57 FIT, Cozy Cookies, SOFACLUB and CorePower Yoga. CorePower occupies the largest and smallest units in the building, connected by an interior walkway.

Lumen’s retail condos nicely balance stable income potential with near-term exposure to an expected upturn in both leasing and general business activity in Uptown. According to the listing, 60% of the offering’s gross floor area is leased long-term: CorePower through 2032 and SOFACLUB into 2036. Cozy Cookies is up for renewal in mid-2027 and 57 FIT in 2028.

Lumen’s next owner could benefit from a marginally tighter supply of street-facing retail in Uptown. Earlier this year, Doran Cos. removed the retail component from its proposed Seven Points redevelopment, leaving five stories of apartments above street-level bike storage and other common areas. The Minneapolis Planning Commission unanimously approved the proposal in May over pro-retail neighbors’ objections.

Lumen on Lagoon

Address: 1211 Lagoon Ave., Minneapolis

Type: Retail (condo)

Square Footage: 13,099 square feet

Asking Price: $2.6 million

Seller: Not listed

Listing Broker: Ted LaFave, Grand Real Estate Advisors

The Carling

One long block west from Lumen on Lagoon lies The Carling, a three-story office and retail building with frontage on freshly repaved Hennepin Avenue. The building dates to 1925 but was repositioned in 2019, according to a joint listing from Transwestern and Kenwood Commercial.

The second floor is fully leased, leaving the third floor and a combined first floor and lower level — both of which have open, flexible floor plans — ready for new users. The upper floors feature smaller offices oriented around a spacious common area, while the lower floors look ripe for restaurant or retail use consistent with the immediate area. The Carling’s immediate northern neighbor is an event venue; a restaurant and lounge sit on the south side. The MoZaic office and retail buildings, Landmark Lagoon Cinema, and more small-format office/retail properties round out the superblock to the east.

Though investment activity has cooled in Uptown since the pandemic, The Carling’s 0.2-acre site could in theory support a higher-and-better use — all the more so if combined with the 0.1-acre parcel to the south. But city zoning codes require that any development along this particular stretch of Hennepin include street-level commercial retail.

The Carling

Address: 2907 – 2911 Hennepin Ave. S., Minneapolis

Type: Office/retail

Square Footage: 26,947 square feet

Asking Price: $3.6 million

Owner: 2907 Hennepin, LLC (Minneapolis)

Listing Broker: Tony Strauss (Transwestern) & Nils Snyder (Kenwood Commercial)