Target Pays $110M to Exit Minneapolis Office Lease

For nearly five years, almost one million square feet of former Target office space in downtown Minneapolis —  where the retail giant is headquartered — have sat largely vacant, even as Target continued paying rent, The Minnesota Star Tribune reports.

Now the retailer has written a check for nearly $110 million to formally break its City Center tower lease, which had been scheduled to run through 2031.

Target vacated the 51-story tower at 33 S. 6th St. in 2021 as remote work reshaped corporate office needs.

But because the lease had more than a decade remaining, the Minneapolis-based company continued covering rent on space that remained mostly dark.

Efforts to sublease the offices yielded minimal results. The only notable tenant was law firm Fox Rothschild, which took roughly 40,000 square feet in 2022 — a fraction of the space Target had occupied.

The lease termination payment, finalized last month, effectively ends that financial obligation.

A Target spokesperson declined to discuss details of the buyout but emphasized the company’s continued presence downtown.

“Target remains deeply committed to downtown Minneapolis,” the spokesperson said, noting the retailer is the area’s second-largest employer and recently consolidated employees into other nearby buildings around its Nicollet Mall headquarters.

Coincidently, protests at several Minneapolis Target stores took place earlier this month, as demonstrators objected to the company’s alleged cooperation with federal immigration enforcement authorities.

Last summer, Target required its largest corporate division to return to the office three days a week.

The move raises a pressing question: Does this deepen the burden on a downtown already struggling with high vacancy?

Minneapolis is grappling with roughly 10 million square feet of empty office space. Even with some companies implementing return-to-office policies, tenants across the Twin Cities gave back 300,000 SF more office space than they leased last year.

While the City Center space has technically been vacant for years, Target’s exit removes a stable rent-paying tenant from the equation — potentially adding financial strain to the property and its owner.

City Center is owned by an entity tied to South Korean conglomerate Samsung, which purchased the tower in 2018 for $320 million — then a record for Minneapolis office real estate.

The ownership group failed to refinance or pay off its $200 million mortgage when it matured in January 2025, though monthly payments have continued.

The building’s assessed value has plunged to roughly $117 million — about half what it was five years ago. Recent sales of other downtown towers have closed at steep discounts, suggesting Samsung could face significant losses if it sells in the current market.

The property is now expected to be listed for sale.

Trouble for Target — or Downtown?

There is little indication that the lease buyout signals financial distress at Target itself. The company remains profitable and has been consolidating office space nationwide as part of a broader shift in workplace strategy.

Instead, the situation appears more reflective of broader challenges facing downtown Minneapolis and urban office markets nationwide.

The City Center tower spans nearly two city blocks and includes 1.6 million square feet of office space, retail levels and parking.

Replacing a tenant the size of Target would be difficult in the current environment. Few companies in the metro area require that scale of office footprint.

Some brokers suggest the termination could open the door to alternative uses beyond traditional office space, including residential or mixed-use redevelopment — though such conversions are costly and complex.

“I think what it does is it opens up the opportunity to explore additional uses,” said Ryan Watts, EVP for CBRE, one of the real estate brokers for City Center.

“While Target had it under control, it was only going to be office,” Watts added. “Now that it’s not under lease by them, I think there’s more ability to explore alternative options.”