The announcement by US retailer Target last week re it giving up one third of the office space it leases in Minneapolis for its corporate headquarters. The move represents a long-term shift by a large employer to fundamentally change work arrangements for a sizeable portion of its workforce, around 3,000 people.
The Minneapolis StarTribune has the story.
Just how different the post-pandemic world of work will look came into greater focus on Thursday when Target Corp. announced that it will move out of City Center, a major downsizing that will reduce its office space in downtown Minneapolis by a third.
Target, the largest employer downtown, said it no longer needs the nearly 1 million square feet it occupies in that skyscraper as it plans for a hybrid future in which workers will combine remote and on-site work. It made the decision even with 10 more years left on its lease.
The company’s exit from City Center will leave a gaping hole, since it takes up about two-thirds of the 51-story tower. All of Target’s offices have been mostly empty in the past year as the company, like many, sent employees home to slow the spread of COVID-19. About 3,500 of Target’s 8,500 downtown Minneapolis employees worked in City Center before the pandemic.
Be sure to read the whole article.
This story supports what I have been saying since mid 2020. I don’t think office businesses will snap back to the way they were. I don’t think CBDs will have the focus they used to have. The world has changed.
I know Minneapolis well and lived there for a time 20 years ago. It is very much like Melbourne. The decision by Target is a loss for the city and a win for surrounding regions, especially smaller towns.
In my own software company, none of the two thirds of team members who started working from home during the pandemic will return to the office. We are not alone.
These changes benefit you.
Think about what you stock as your inventory mix is key to determining who shops your shop. Think about how you can pitch your business in this changed situation. I know of some newsagents who are well established in catering to this change, which is terrific news!
Thanks Mark, this story reinforces what we are seeing here in Australia. Many CBD office workers are still working from home. Many have relocated to the regions. One simply has to follow the money. Retail & Office space vacancies in many regional towns in close proximity to the Capital cities are non existent and commercial property sales and demand in these towns are at all time highs. Meanwhile CBD vacancies continue to climb and rentals fall. The next stage of the economic cycle is just around the corner and will deliver more change.