A former Sam’s Club in suburban Minneapolis that’s now the office headquarters for a technology services provider is a prime example of what leaders at a global design firm said is set to become a widespread trend — the conversion of retail properties to other uses.
In the world of commercial property conversions, office-to-residential has been the predominant example, especially with office attendance rates still struggling to rebound from the pandemic era.
Different types of conversions will soon become common in property development, according to a new report by Gensler, the world’s largest architecture firm. Financing will become more accessible because of lower interest rates, and new zoning laws and design tools are expected to lead to more conversions, Gensler said.
Conversions of all stripes will become legitimate ways to repurpose buildings that were originally constructed for another purpose, San Francisco-based Gensler said in its 2025 Design Forecast issued on Thursday.
“Advances in various types of building conversions unlock a second life for a range of assets,” Gensler said.
The Loffler Cos. headquarters at 3745 Louisiana Ave. S in St. Louis Park shows how developers and designers are approaching the conversion prototype from new angles.
In 2019, after Sam’s Club closed the location, the St. Louis Park City Council approved rezoning the site to half business park and half high-density multifamily, according to a city report. Planners decided those uses would best fit the city’s goal of encouraging transit-oriented development, as the local public transit authority is expanding a light rail line and will build a new station on Louisiana Avenue near the former Sam’s Club site.
Loffler was interested in the building because, at 150,000 square feet, it was large enough for the company to consolidate employees in one location from five separate offices. Loffler also uses part of the building as a warehouse to store computer equipment.
Architects at Gensler, who designed the conversion, made extensive use of the large indoor space that comes with a typical Sam’s Club location.
“The space challenged the design team to break down the scale through the demolition and clever distribution of workplace amenities to create a cohesive visual feel more akin to an internal campus,” Gensler said in a project description.
However, retail conversions to other property types are already happening. Walgreens, CVS and Rite Aid have closed thousands of locations nationwide, flooding the market with vacant retail properties. Many are being converted for uses other than retail, including restaurants, healthcare facilities and car washes.
In addition to office space, the former Sam’s Club in the Minneapolis area was large enough for Gensler to include offices, a warehouse, a cafe, a bar, workout rooms, stadium seating, a golf simulator, a covered veranda, a large interior mezzanine and outdoor spaces, the firm said.
It's not the only former retail space in the Twin Cities to receive a makeover for a new use.
The development firm 601W led a conversion of the former flagship Dayton’s department store in downtown Minneapolis, a 1.2 million-square-foot structure dating to 1903, to offices, as well as some upgraded retail space.
But Gensler expects the pace of conversions of all property types will accelerate.
“The adaptive reuse boom is poised to create valuable new real estate beyond just office-to-residential conversion,” Gensler said, naming retail-to-healthcare, retail-to-sports, office-to-senior living and office-to-science labs as potential conversion types.