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Rand hotel enters tough market

 November 25, 2020 5:03 pm

After several years of major renovations and planning, the Rand Tower Hotel in downtown Minneapolis is opening its doors Wednesday.

The 26-story hotel at 527 S. Marquette Ave. is bringing hundreds of guest rooms, numerous amenities including a rooftop bar, meeting spaces and an art deco flare to the Minneapolis hotel market. The hotel is entering a market with a significantly lower occupancy rate compared with this time last year.

Built in 1929, the building came with numerous art deco features — ones the new owner, Nick Peterson, kept intact and used to help guide design.

The design pays homage to the building’s namesake and builder, Rufus Rand Jr. He was a renowned pilot from Minnesota, a war hero and an industrial leader, said Peterson, who is also a principal and founder of Maven.

The building’s 270 guest rooms, which range from studios to one-bedroom suites, have natural lighting as building density nearby is low for a downtown area. Terrazzo floors span the lobby and other features, like the elevator lobby, were finished to reflect historic designs, according to a news release.

The Rand Tower hotel’s 270 guest rooms, which range from studios to one-bedroom suites, have natural lighting as building density nearby is low for a downtown area. (Submitted photo: Nicholas James Photography)

The rooftop bar on the fifth floor has a retractable roof and will serve French cuisine for three meals starting next spring. The building also has meetings and a cocktail and small plate dining space on the sixth floor.

RAND TOWER MN OWNER LLC purchased the building in 2017 for $18.65 million, according to county property records. In addition, they’ve invested an approximately $103 million in building renovations, Peterson said.

The building is on the National Register of Historic Places, allowing developers to leverage the state’s historic tax credit to also help fund the work, Peterson said.

But its historic status made renovations “super hard,” he said.

Crews from Ryan Cos. tunneled through 26 stories to create a second stairwell. And building material could only be transferred through interior elevators, as windows had to remain intact due to the historic status.

The project was also made more difficult by the ongoing COVID-19 pandemic. Crews were concerned about the project’s unknown future. Regardless, they were able to finish construction weeks earlier than planned, Peterson said.

“We came out of it with the most amazing product and the most amazing hotel, I think, in Minneapolis,” he said.

Housed under Marriott Tribute Portfolio and managed by Oxford Hotels & Resorts LLC, the hotel offers a lineup of new technology, including an expansive network of air filtration systems. All rooms and public areas, like the elevators, will have their own systems, and guests will be able to monitor their room’s air quality, Peterson said.

“We’re going to have all those things because I think transparency and communication is so important right now,” he said.

Located at the intersection of South Marquette Avenue and South Sixth Street, the hotel is connected to the skyway system and is located near Target Field, Target Center and the light rail. The hotel was designed with business travelers and tourists in mind, Peterson said.

With the pandemic ongoing, Peterson isn’t sure when the hotel will see normal occupancy levels.

“There’s no playbook. You don’t even know what the challenges are, there’s a new challenge every day,” he said.

The hotel is entering a market that, from Nov. 15 to 21, had an occupancy rate of 14%. During nearly the same timeframe last year, Minneapolis’ hotel occupancy rate was over 61% — resulting in a year-over-year percentage decrease of more than 77%, according to data from STR.

Even with low occupancy rates, Peterson said he’s confident that people will be drawn to the hotel. The hotel gives people a reason to return to downtown, and he plans to adapt to the needs of customers and the advice of local leaders.

“We’re going through really tough times. … If you can just battle through it … and be as good as you can be,” he said. “And let everything else come at you.”

 

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