C
hef David Fhima's Mother Dough bakery and cafe has seen significant success in downtown Minneapolis, with a third location planned for the U.S. Bancorp Center as part of a $10 million renovation. The concept started slow but is now thriving, thanks to favorable lease deals offered by building owners looking to boost curb appeal.
Some landlords are offering rent based on monthly sales, funding improvements to spaces, and providing free months to attract tenants that enhance the street and skyway experience. Fhima credits these incentives for Mother Dough's success, saying building owners view restaurants and retailers as "placemakers" that bring life to their buildings.
The downtown Minneapolis real estate market is adjusting to the post-COVID world of hybrid work, with office landlords competing for tenants by offering high-quality amenities. Gray Fox Coffee owner Chris Bjorling said he was brought in to activate a ground-floor atrium at Deluxe Plaza in 2018, and his business model has allowed him to be a stable and long-term tenant.
However, the competition for office tenants has led to retail vacancies, with about 40% of spaces vacant in Downtown West. Piedmont Office Realty Trust is renovating its U.S. Bancorp Center on Nicollet Mall, aiming to deliver a hospitality feel that will attract new tenants like Mother Dough and Fhima's commissary concept.
Real estate officials emphasize the importance of finding the right fit for each building, with a mix of fast-casual, high-end sit-down restaurants, and other businesses. While not every property can afford to discount space, those offering incentives are often interested in food and beverage offerings that appeal to office tenants and drive foot traffic.
The downtown area is betting on its future, with some properties like Gaviidae Common soliciting a wide array of retailers to fill storefronts vacated during the pandemic. After years in the red, CityView Commercial's Charlie Friedler is hopeful that the building will start turning a profit as retailers begin to thrive.
It remains unclear how long opportunities for deals will exist downtown, but real estate officials are optimistic about the potential for a mixed-use downtown with a greater residential population creating vibrancy at all hours.
