(This story was updated July 1 to include comments from Radisson Hotel Group Americas and Transwestern Real Estate Services.)
Yet another tie is being severed between the Carlson family empire and the international hotel business it spun off in 2016.
Radisson Hotel Group Americas, a division that oversees all of Radisson's business in the Western Hemisphere, plans to move its headquarters out of a Carlson-owned building in Minnetonka, Minnesota, into a building completed this year that is the first speculative office property to go up in Minneapolis' western suburbs in about two decades.
The company has signed a lease for 36,000 square feet of office space at 10 West End, an 11-story, 343,000-square-foot property at 1601 Utica Ave. S. in St. Louis Park, Minnesota, according to the landlord's brokerage, Transwestern Real Estate Services. The company, which is taking over all of the seventh floor, plans to move by January 2022.
The relocation of Radisson Hotel Group Americas' head office further distances the company from its erstwhile owners, the Carlson family, a Minnesota dynasty founded on a marketing, real estate and hospitality.
As of the mid-2010s, Carlson Hotels Inc. included 1,400 hotels in operation or under development in 115 countries, running under a number of well-known brands such as Country Inns & Suites,the Park Inn and Radisson.
In 2016, Carlson Hotels Inc. was sold to Chinese conglomerate HNA Group and later repackaged under a new name and parent company, the Radisson Hotel Group. Radisson Hotel Group was resold in 2018 to another Chinese investment group, a consortium led by Jin Jiang International. Jin Jiang is ultimately owned by an entity of the government of the People’s Republic of China.
Through all of it, Radisson Hotel Group Americas was housed in the Carlsons' flagship development, the 701 Tower at the 250-acre Carlson Center campus in Minnetonka.
Nevertheless, the move is not a surprise. In December 2017, shortly before the company dropped "Carlson" from its name, executives told Minneapolis' daily newspaper, the Star Tribune, that they were considering new locations around the Twin Cities.
"It's kind of like the little bird stepping out of the nest. We are not part of the Carlson family anymore," said Josh Hoffman, then the hotel group's chief human resources officer. "It's difficult to break away from that image when we have that in our name, when we have that in our location, when we have that in the building that we sit in."
With the new lease, all 220 corporate employees are being relocated from the firm's old 58,000-square-foot space at the 701 Tower in Minnetonka, which is part of the Carlson Center development.
In a statement to CoStar News, Radisson Hotel Group Americas executives said 10 West End’s “fantastic location” and “beautiful skyline views of Minneapolis” played a part in their choice, but the company was persuaded by the “blank canvas” the building offered.
“The space at 10 West End is a new building where we can custom design our floor to cater to the needs of our organization. It also provides better use of the square footage, where our current space was designed for our organization decades ago,” company executives wrote. “All employees will be on the same floor, which creates a collaborative environment with plenty of meeting space.”
The company’s new headquarters will be designed to accommodate a hybrid work model, in which employees split time between remote work and in-office hours, which demands a flexible space that can easily change as employees’ work patterns shift.
The deal is also another coup for 10 West End. The high-profile speculative project was developed jointly by Minneapolis-based developer Ryan Cos. and local real estate firm The Excelsior Group and completed January this year.
By the time the building opened, Transwestern had already bagged two major tenants: investment fund manager CarVal Investors and the global engineering firm HDR, which both signed large leases over 2020. By May 2021, the building was about 40% leased.
With Radisson in hand, 10 West End is about 60% leased, according to a statement from Transwestern Principal Mike Honsa.
A number of full floors are still available: three, four, eight, and the penthouse level on 11, which comes with a 1,800-square-foot sky deck. Four tenants are already moved in and operating there, a list that also includes the residential design firm Charlie & Co., and Blackburn Investments.