Gander Mountain, with 39 stores in Minnesota, Wisconsin, Michigan, Indiana, Ohio and Pennsylvania, specializes in hunting, fishing, and family camping gear, as well as outdoor apparel. SPS Commerce specializes in providing retail and manufacturing business-to-business exchanges, counting Sears, Kmart, Cisco and Walgreen's as clients.Duke-Weeks Enters Duluth With Build-to-SuitBy Jim McCartneyREIT will develop a 153,400-sf office for United Health Group. DULUTH, MN—Duke-Weeks Realty Corp. is building a 153,400-sf build-to-suit office building for United Health Group in Duluth, about 150 miles north of the Minneapolis-St. Paul area. The two-story facility, which will house more than 400 new employees over the next few years, will be at the intersection of Ricelake and Arrowhead roads, two miles northeast of Downtown Duluth. The project will include up to a $2.5 million tax-increment financing to pay for utilities related to the project.

In the Twin Cities area, Indianapolis-based Duke-Weeks owns, manages or has under development more than 8.4 million sf of office and industrial properties. Duke-Weeks' office development for United Health Group will represent its first construction and lease activity in the Duluth area. The project is expected to be ready by March 2001.E&V Named for Glenwood Hospital ProjectBy Jim McCartneyFirm will CM on 10,000-sf patient wing addition.GLE NWOOD, MN—Glacial Ridge Hospital chose E&V Consultants and Construction Managers to be the construction manager on a $6.2 million building in Glenwood, MN. The project consists of a 10,000-sf patient wing addition, a 14,000-sf clinic addition and 13,500-sf of renovations, including lab, radiology and administration. Project completion will be in fall 2001.Office Vacancies Edge Up in Twin CitiesQ2 vacancies crept up to 8.9%, despite robust absorption.By Jim McCartneyDespite a strong leasing market in which the Twin Cities office market absorbed 2.5 million sf of space in the last year, vacancy rates in the area were up to 8.9% from 8.3% in the market, according to a second quarter market survey from Colliers Towle Real Estate.

The upward movement is largely because of the 2.9 million sf added to multi-tenant market through new construction, redevelopment and retail-to-office conversions, according to the report. Subtracted from the office market, which totals 59.5 million sf, are four buildings converted to single-tenant use and one building reclassified as industrial space.The expansion breaks down this way: two million sf in 12 new office projects; 325,000 sf in renovated buildings; three former single-user buildings totaling 488,000 sf converted to multi-tenant buildings; and 190,000 sf of retail space converted to office use. Pent up demand and surprisingly strong technology-based growth in the Downtown Minneapolis office market account for much of the absorption, as more than 1.2 million sf was filled in that market.

Internet-based companies are active in the Minneapolis CBD warehouse district, where many of the older buildings are being renovated to suit their non-traditional requirements and where small firms find the old brick walls, high ceilings and exposed beams they fancy. One of the biggest leases was Retek, a Minneapolis-based software firm, which will anchor the 450,000-sf building Minneapolis-based Ryan Cos. is building on Nicollet Mall.

"Many would agree that this trend could end up to be a fad if the recent tumble of Nasdaq firms curtails future IPO deals for tech-related companies," says Barbara Byrne, the economist at Colliers ABR in New York City. "However, the technological revolution still has room to grow, given the market potential for information technology abroad."

Downtown Minneapolis saw most of the new construction, as 1.4 million sf was added in new space. So far, however, the CBD still has the lowest vacancy rate in the Twin Cities area at 6.3%.Minnesota Life Seeks TenantsPreparing for a big move, the owner/occupant hopes to fill its current space with outside tenants.Jim McCartneyST. PAUL, MN—In an attempt to fill more than 200,000 sf of vacant space that will pop up when its new office building in Downtown St. Paul is ready in mid-October, Minnesota Life said it would agree to lease space in its current headquarters building across the street. In its search for tenants, Minnesota Life will agree to lease space not just in its new 635,000-sf 401 Robert building, but also at its 375,000-sf headquarters building at 400 Robert. It will even consider offering space at its 132,000-sf Lafayette Center building in Lowertown.

"We don't consider our campus a monolithic entity," Minnesota Life spokeswomen Maggie Jensen told GloteSt.com. Given its growth pattern, Minnesota Life eventually plans to occupy all the space in the 400 and 401 buildings. Until it is big enough to occupy the buildings, plans were to lease the extra space in its new building to outside tenants and hired Welsh Cos. as its leasing agent. If a prospective tenant is interested in space at the 400 building (now filled with Minnesota Life employees), which is less expensive than the new 401 building, Minnesota Life would likely try to accommodate them, Jensen says. Likewise, if a prospect were interested in its Lafayette Center, the company would consider a deal. But Jensen adds that the leasing strategy currently is focused on the 401 and 400 buildings, which need to fill from 200,000 sf to 250,000 sf.

Minnesota Life plans to open its new 401 Robert building on Oct. 18 to coincide with the debut of the new skyway connection to the building; originally, it planned to delay moving into the building until January 2001. That means the retail shops on the bottom floors and the underground parking ramp have to be ready to go then, too.Ryan Cos. Buys and ExpandsDistribution Center in IllinoisA 190,000-sf addition will be ready by early 2001, say Ryan officials.Jim McCartneyMINNEAPOLIS—Ryan Cos. US has bought a 250,000-sf distribution center in Carol Stream, IL. Minneapolis-based Ryan plans to expand it by 190,000 sf. to improve its functionality and accommodate the growth of the office and industrial building's primary tenant, Saturn Freight Systems Distribution.

Given its location on a former contaminated site, Ryan officials said the distribution center project poses a number of challenges, especially since the improvements need to be made while the tenant stays in the facility. Ryan expects the construction to be completed in February. The building was bought with assistance from Insignia/ESG.