A Four Seasons Hotels and Resorts property under construction in Minneapolis represents the real estate developer’s debut into hotel development.
ST. PAUL, Minnesota—The Minneapolis skyline is changing, as construction of the RBC Gateway project is underway—a project that includes United Properties’ first foray into hotel development.
The more-than-100-year-old company is no stranger to commercial real estate in the Twin Cities, Denver and Florida, but hadn’t entered the hotel space. The Four Seasons in Minneapolis was the right project for its hotel debut, said Scott Peterson, United Properties’ VP of hospitality and office development.
“We saw a need for a world-class development (in Minneapolis), and increasingly these include mixed-use environments,” he said. “We saw an opportunity to do both in downtown Minneapolis with a five-star hotel.”
The 37-story tower will be among the city’s tallest when it opens, still slated for 2022, according to the company. RBC Wealth Management’s world headquarters is the anchor tenant, and above the office space will sit eight floors of 222 Four Seasons guestrooms, then six stories of 33 private residences.
As of press time, construction still is happening in Minneapolis, with underground parking completed and work beginning on the exteriors above the ground, Peterson said.
Still, he acknowledges that the coronavirus (COVID-19) pandemic has and will continue to have a widespread impact on the world—including the hotel and other CRE industries.
“Coronavirus impacts everything, regardless of industry, regardless of market or place on the globe,” Peterson said. “But you get back to the fundamentals of developing good assets and good locations. We’re a 100-year-old company, and that’s why we’re sitting here as a developer that’s very well-capitalized. We’re being smart, looking at opportunities that may arise while also working on our own projects in the process, and hoping to get back to full steam ahead soon.”
Peterson said right now the company hasn’t experienced stoppages or materials shortages yet, but knows that may happen, and is planning and considering every angle.
History and scope
The company, which represents the real-estate development arm of the Pohlad family, has been privately held throughout its history.
First owned by the Hamm family and later acquired by the current family ownership group in 1998, United Properties was built on commercial real estate in the Twin Cities. Today, the 84-person company develops and asset-manages across real estate classes including office, industrial, mixed-use and senior housing, and is led by co-Presidents William Katter and Matt Van Slooten.
Mixed-use developments, such as the Gateway project, represent many of United Properties’ strengths, Peterson said, and including a hotel element in this project was a natural fit.
“We’re currently pursuing other opportunities and building a strategy to integrate hotels into mixed-use projects to make them more appealing,” he said. “We see hotels providing some incredible amenities to office tenants—everything from state-of-the-art fitness facilities to state-of-the-art meeting rooms.”
Finding those complements is part of what makes Peterson excited about expanding the company’s hotel portfolio.
“If you look at space planning in new office developments, per-square-foot, per-employee and per-floor-plate (metrics) are getting reduced from where they were a decade ago,” he said. “There are real synergies for companies that can sign a lease with a smaller floor plate because they have access to meeting rooms a couple floors below in the same project.”
Four Seasons Minneapolis
Peterson called the Gateway project a “five-year love affair, requiring a great working relationship to get the project designed and launched, and both parties are equally excited about it.”
The project’s anchor tenant, plus its location in downtown Minneapolis’ Gateway District near Target Field, Target Center and the waterfront, will create demand for the luxury hotel, Peterson said. The city’s high density of Fortune 500 companies are another driver.
Four Seasons Hotels and Resorts will manage the hotel.
Peterson said the company is excited to add hotel development to its long-term strategy and legacy in the city. The project location has been home to two different prominent hotels dating from the late 1800s, both long gone, and Peterson said to return the corner to that type of use is a boon for the company and the city.
“This is the right brand for the project, the right brand for the city and the right brand for our company to be part of,” he said.