Capella Education Co. is extending its lease for another decade in the downtown Minneapolis tower that bears its name. It plans to downsize as well as update its space.
Last week, the for-profit education company amended its current lease at Capella Tower, according to a Securities and Exchange Commission filing made public Tuesday. The lease was set to expire at the end of October 2018 and covers 371,225 square feet. The amended lease extends the term through October 2028.
By the end of October 2017, Capella will reduce its footprint in the building, located at 225 S. Sixth St., by about 17 percent to about 307,000 square feet.
Capella currently has offices on floors 4 through 10 and floor 15 in the complex, which is made up of a 56-story tower with the Capella name and the adjoining 20-story Star Tribune Building. In the remodeling, Capella will relinquish space on the 10th and 15th floors.
"The bottom line is we had a lot of space that we can use more efficiently," said Mike Buttry, Capella's vice president for public affairs.
The base rent for the space, not including operating costs and taxes, will range from $14.20 to $16.96 per square foot.
Landlord Minneapolis 225 Holdings LLC, an affiliate of Maryland-based ASB Real Estate Investments, will fund a tenant improvement allowance of a little more than $11 million for Capella to use to update its workspace.
"We did research with our employees and one of the things that they most value about working at Capella is that this is an easy spot to commute to, and we engage with the Minneapolis downtown community," Buttry said. "We wanted to make sure to preserve that. It's a big part of who we are."
Capella, which is known for its online Capella University, last month reported a second-quarter profit that beat expectations. It has had a presence in the downtown tower since 2004.
Nicole Norfleet • 612-673-4495
Twitter: @nicolenorfleet
