Sumitomo Corporation of America is digging in on downtown Minneapolis, putting more than $10 million into renovations at SPS Tower, the 31‑story office building at 333 S. 7th St. The refresh ranges from new tenant suites to a putting green and public‑facing programming. It helped convince the building’s namesake tenant, SPS Commerce, to sign a 15‑year renewal that keeps roughly 200,000 square feet anchored downtown. The owner is also studying geothermal heating and cooling as part of a broader push toward carbon neutrality.
As reported by the Star Tribune, Sumitomo paid about $144 million for the property in 2019 and has watched the building’s assessed value fall to just over $43 million while continuing to invest more than $10 million in upgrades. Minako Sakuma, Sumitomo’s general manager for the real estate division, told the paper that “Sumitomo’s business model is always to see the mid‑ to long‑term,” a philosophy that helps explain why the company is adding capital instead of cutting its losses.
In a corporate release, Sumitomo framed the acquisition as part of a long‑term strategy to own and operate downtown office assets in key U.S. markets, describing SPS Tower as an important foothold in the region and a core piece of its Twin Cities playbook.
Why SPS Commerce Stayed
SPS Commerce renewed a 15‑year lease that covers about 200,000 square feet, a footprint that represents more than 30% of the tower’s space and preserves one of downtown’s larger private‑sector anchors. According to Finance & Commerce, the company is planning a multi‑year renovation of its offices inside the building. The Star Tribune reports that SPS Commerce employs roughly 1,500 people in the urban core, a headcount that makes the renewal a meaningful win for downtown boosters.
Lobby, Plaza, And A Geothermal Pitch
To keep SPS and other tenants happy, ownership and management have been reworking the building’s common areas. The upgrades include a 6,000‑square‑foot Turf Club putting green, renovated skyway lounges and refreshed conference facilities that are meant to feel more like modern coworking space than old‑school corporate real estate. The building’s SPS Tower “Transformation” page also lists an estimated $10 million to $12 million conversion to geothermal heating and cooling, positioning the tower for a lower‑carbon future if the project moves forward.
Management has rolled out plaza‑level programming such as bocce, summer events and new ground‑floor retail to pull more people to the site and keep the block from going quiet outside of office hours. Transwestern notes additional on‑site features, including a living wall in the lobby that replaced the old fountain as part of the broader repositioning effort.
What This Means For Downtown
With downtown office vacancy still running high, Finance & Commerce cites market reports that put overall vacancy near the low‑30s percentage range. In that environment, landlords face a stark choice: sell into a soft market or spend real money to hold on to tenants. Sumitomo’s decision to invest rather than exit offers one emerging playbook for owners that want to keep major employers in the core while Minneapolis continues to adjust to hybrid work and a reshaped office landscape.
