“This is not your father’s office…because you can’t have lightbulb moments under flourescent lighting,” says Osborn370 — the new name for an old building re-opening in downtown St. Paul this fall.
Purchased from Ecolab on July 1 by a group of investors including local angel John Bergstrom and repeat tech entrepreneur Scott Burns, the 20 story edifice bills itself as a “Perfect for start-ups, freelancers and companies of all sizes and sorts.”
So we connected with Bergstrom and Burns to hear more, in their own words, just what’s in store…
What is a hub, is it any different from coworking, and if so, how?
Osborn 370 will be a multi-tenant building that caters to growth and innovation companies. We already know that several high-growth technology companies will be located in Osborn 370 by the end of 2017. The building is large enough to offer community, density and flexibility to the companies that call it home.
Three to five floors will be dedicated to a mix of coworking, shared tenant amenities, flexible suites and accelerator space. The exact mix is not yet final, but the building will accommodate growth companies of all sizes and types.
Will there be a membership component for individuals/freelancers/solopreneurs, similar to that of the coworking model?
We see flexible coworking as a key option in a building like Osborn 370 so we will be contracting with a coworking company to operate our coworking floor. This partner will manage memberships. The same partner will likely operate our flexible suites floor as well. From our research locally and around the country we found that coworking space combined with space for companies to grow into are “flexible suites” as well as more traditional single tenant floors and the building supports that approach. We also know that suburban companies are now frequently seeking space in downtowns in order to supplement / complement suburban offices, and we will be welcoming those types of tenants.
How about suites or even full floors for teams/groups/companies?
Our floors are 10,000 square feet each and we are working with a number of potential tenants that will lease full floors in addition to the several floors dedicated to coworking and flexible suites. We are talking to tenants that would take up to five floors of the building.
What will be unique about the space relative to other options available?
We will be the only building in downtown St. Paul with a distinctively growth and innovation focus. The lobby level, outdoor plaza and amenity floor will provide uniquely attractive common area features for our tenants and guests. We expect Osborn 370 to have the highest density ever seen of tech-oriented and growth businesses in St. Paul and one of the best concentrations in the Twin Cities. This will offer an awesome vibe and downtown presence to all tenants.
What does converting the tower into a multi-tenant building as you envision it look like in terms of a a timeline and dollar investment? How far away is the reality?
There will be tenants moving into temporary spaces in the building in late July, and major renovation will begin at that time with focus on the common amenity floors, the lobby and the flexible suites floors. We expect the building to be hopping by early 2018 even as construction and buildouts will continue in 2018 as new tenants enter the building. We have a strong pipeline of tenants who expect to move some into temporary space almost immediately and the first finished floors will be available starting in October. Total investment by our team will be well into the eight figures over the next 12 months as we remodel the entire building.
As the capitalists that you are, what do you want to accomplish with your investment in the end?
We expect to achieve an attractive return for a real estate project of this type over a period of many years. We want to demonstrate to other owners in St. Paul that investing in world class space generates better returns than limiting investment to keep rents below market.
From what we’ve seen, there is massive demand to pay market rates for space as long as the space is world class. Our ownership team including Schafer Richardson, Rich Pakonen, Clint Blaiser, Tanya Bell, John Bergstrom and Scott Burns are excited about both the investment opportunity and community impact of this project.
Will you be using the public’s money in any way, or receiving special favors from the government as part of your plan? Have you already?
We have received amazing support from the public and private sector for this project, but not financial support or subsidy. Investment dollars are coming from our ownership group and bank debt will leverage our equity on ordinary commercial terms.
St. Paul lacks business activity relative to Minneapolis and even has some attrition in terms of tech. Why do you think that is and do you want to change the trend?
There are some outstanding technology companies in St. Paul including Infor, Granicus, Reeher, Ilos, WindLogics, Hindsite Software, and others. In the past year both Ecolab and Securian have continued to up their commitment to St. Paul as well with each maintaining and growing teams of innovators in St. Paul. That said, St. Paul will benefit from having more attractive space for technology companies and to have that space create a focal point where entrepreneurial companies can benefit from the density, community and flexibility they need.
We hope to catalyze change in this respect with Osborn 370 with ripple effects nearby. The exciting development of the former Macy’s building a block away with the new Minnesota Wild practice facility on top and a brewpub and retail on the street level is happening simultaneous with our project and we very much expect a much more dynamic Wabasha Street feel starting very soon.