The Lumber Exchange, a hulking Richardsonian Romanesque landmark that has anchored downtown Minneapolis since the 1880s, is officially heading to auction. That move suddenly puts one of the city’s oldest office blocks up for grabs, as developers and preservationists again weigh reuse and conversion against the hard math of today’s office market.
The building’s current owner had already paid for architectural plans and historic preservation approvals, then tried marketing the property as a conversion play, according to the Minneapolis/St. Paul Business Journal. The paper describes the 1880s complex as Class B office space and says the auction puts long-simmering redevelopment questions right back on the table.
Who’s managing the building
Eden Prairie-based Hempel Real Estate, which assumed management of the Lumber Exchange in 2024, has floated a mixed-use future that could include a residential conversion. In a press statement published by Hempel Real Estate, the company said it plans to “honor its historic character while exploring opportunities for a mixed use development.”
About the building
Listing details on LoopNet show the property sitting at the corner of Hennepin Avenue and 5th Street, with roughly 249,560 square feet in total. The structure, completed in 1885 and designed by Long & Kees, is listed on the National Register of Historic Places, per Wikipedia, which means any renovation work will have to clear historic approvals. For a buyer, that combination of sheer size and preservation oversight will shape what is financially feasible.
Why the auction matters
All of this plays out against a rough backdrop for downtown offices. Central business district vacancy in Minneapolis is hovering near 30%, according to the Star Tribune. Hoping to nudge more office to housing projects across the finish line, the city adopted an Office to Residential Conversions amendment in September 2024 that speeds some reviews and trims certain procedural steps, per the City of Minneapolis.
What comes next for buyers and the city
The auction will effectively test how much risk buyers are willing to shoulder for a historic heavyweight in a soft office market. Local coverage of the broader Twin Cities office sector shows owners are writing assets down and buyers are insisting on discounts to account for construction and financing risk, as reported by Finance & Commerce. The Minneapolis/St. Paul Business Journal also notes that the current owner’s investment in architectural plans and historic approvals could speed things along for any buyer that sticks with a similar redevelopment path…