The New York-based owner of UnitedHealth Group's Minnetonka headquarters building has started marketing the property for sale or lease.
UnitedHealth leases the entire building at 9900 Bren Road East in Minnetonka, on the western edge of Highway 169 just north of Highway 62. New York-based LCN Capital Partners owns the property.
UnitedHealth's lease runs through the end of 2024, but Minnesota's largest public company did not renew the lease by the deadline set for the end of 2022.
The health insurance and services giant said it is reviewing its real estate options.
"Minnesota remains our home," UnitedHealth said in a statement. "Given our flexible working model, we are continuing to evaluate the best arrangement for our employees who choose to come to an office space to work. We have several buildings in the immediate area with space available and are assessing our employees' needs as it aligns with our office space."
UnitedHealth has space in two other office buildings adjacent to its current headquarters.
The pandemic has driven major changes in how companies are using office space. Many companies need significantly less space than before as remote and hybrid work arrangements have taken hold. Target, for example, did not renew the lease on space in City Center in downtown Minneapolis.
"It doesn't surprise me that [the UnitedHealth building] is being put on the market. It seems to be consistently across the board that large companies are looking to streamline their operations," said Mike Gelfman, executive vice president with the local office of Toronto-based Colliers, a commercial real estate services firm.
Thomson Reuters recently retained Colliers to sell 179 acres of its Eagan campus, including a 1.1-million-square-foot office building and three data centers. The hybrid work trend also drove that decision.
Gelfman, who specializes in suburban office space, said it will be challenging to find one company who wants to lease the full building.
The UnitedHealth building is about 344,000 square feet on a 20-acre site. It has been UnitedHealth's headquarters since 1998.
"There are few large users in the market looking for a product of that size," Gelfman said.
UnitedHealth in December 2014 sold the property to LCN in a sale-leaseback deal for $78.75 million, according to Hennepin County property records.
The building was originally headquarters for the Minnetonka-based developer Opus Group, which built it in 1981.
Dan Gleason, executive managing director with the local office of Chicago-based Cushman & Wakefield, is part of the brokerage team marketing the property.
Since the property has long been a private corporate headquarters, Gleason said that most prospective owners and tenants are not familiar with the building.
"It hasn't been on the open market for brokers and companies to see," he said.
UnitedHealth invested in amenities including a fitness center and a lounge/cafe, Gleason said.
As of yet, there is no listed asking price. Converting the building into residential units is another possibility, he said.
Since 2017, about 1,700 new apartment units have been completed or under construction in the Opus Business Park area, said Julie Wischnack, Minnetonka's community development director.
LCN Capital has a portfolio of more than 300 properties in North America and Europe.