Anne Bretts, Special to Finance & Commerce
Finance & Commerce
Date: April 23, 2015
* Edited Article Summary
115 W. Cherry St., Mankato
The Tailwind Group is in the middle of construction on the Ridley Tower, a 50,000-square-foot, five-story Class A office building that’s part of Tailwind’s ambitious $40 million Block 518 redevelopment in downtown Mankato.
The building set for completion in November will be the headquarters for Mankato-based Ridley Inc., a major producer of livestock feed and nutritional products. Ridley has reserved 70 percent of the building.
As Finance & Commerce has reported, Block 518 included two new office buildings, a mixed-use retail and apartment building and a public parking ramp, covering about 70 percent of the block shared with four existing buildings.
The project is expected to cost a total of $40 million by the time the last building opens later this year. That total includes about $10 million in public money for the parking ramp and related infrastructure.
The sleek—and expensive—new offices were a gamble that paid off, Mankato City Manager, Pat Hentges said. The developers tapped into pent up demand for Class A space and have created what he calls “office envy” among some tenants in older buildings.
They had the idea of doing it right,” he said. “They dreamed big.”
Smith believes that he and brother Landon Smith and their partners Reggie Reed and Michael Sather benefited from great timing.
“Keep in mind that there hasn’t been a new office building built in downtown Mankato since 1983,” he said. The average lease rate before the latest construction was $13 to $16 per square foot, but Tailwind tenants have been willing to pay from $17.50 to $21 per square foot,” he said.
Not too bad from a team of four entrepreneurs who started out creating and managing college housing 10 years ago—while Smith was still in his 20’s—and added commercial work in the last five years. They now are doing projects throughout southern Minnesota, but Block 518 is by far their biggest venture.
“It grew organically,” Smith said of the way the Mankato project has expanded. The first finished building in the block, Profinium Place started out as a five-story Class A office building at 100 Warren St. It quickly became a seven-story, 75,000-square-foot building that was 80 percent leased when it came out of the ground, he said.
The two-story parking ramp swelled to four stories to meet demand. It opened in February.
Tenants in Profinium Place, which opened in March, include the Mankato branch bank of Fairmont-based Profinium Inc, CPA firm Abdo, Eick and Meyers and commercial real estate company Lidstrom Commercial Realtors.
ISG, which designed the project has staked out space for new offices in Profinium Place. Builder Met-Con Cos., which has offices in Mankato and Faribault, essentially built its own local office.
The third building also under construction, is an as yet unnamed 40,000-square-foot mixed-use building at 512 S. Front St. It includes 6,000 square feet of retail and office space on the first two floors and 20 upscale loft apartments on four upper floors.