Downtown Minneapolis Sleep Number building’s data center drives reported $235 million sale, reshaping property’s future
A downtown asset built for computing, redefined by today’s demand
A block-long building in downtown Minneapolis that houses Sleep Number’s headquarters has changed hands in a transaction widely reported at $235 million, a price level that reflects the growing value investors place on “mission-critical” digital infrastructure. The property at 1001 Third Ave. S. was originally developed to support large-scale computing operations and has continued to be marketed and operated as a data center even as office users—including Sleep Number—occupy substantial portions of the structure.
Why the data center component matters to valuation
Unlike conventional office buildings, data centers are valued primarily for their power capacity, redundancy, cooling infrastructure, and network connectivity. At 1001 Third Ave. S., those features were embedded in the property’s legacy as a former operations and data facility. Over time, the building supported a mix of office and data equipment uses, an arrangement that has become increasingly common as companies seek proximity to robust connectivity while retaining flexibility for office or lab space.
The deal underscores how data center infrastructure can outweigh traditional office fundamentals in pricing. In the current market, many older downtown office properties have faced declining values, while facilities with significant electrical and mechanical capacity have attracted renewed attention—particularly as artificial intelligence workloads and cloud services expand demand for data-hall space.
Ownership history: from discounted sale to premium pricing
The building’s trajectory has been notable. In 2015, the property sold for $22.4 million when it was a former data center seeking repositioning and reinvestment. Sleep Number later signed a long-term headquarters lease for 211,000 square feet, ultimately relocating downtown in 2017. The site subsequently evolved into a data center property that also hosts corporate occupancy, including technology and connectivity tenants.
Operational shift: formalizing full-building data center use
In late 2025, Minneapolis planning actions moved to formalize the data center as a primary use throughout the building, aligning zoning and permitting treatment with how the structure has historically functioned—combining office floors with specialized communications and computing infrastructure. That step can be significant for investors and operators because it clarifies permitted uses for future build-outs, mechanical expansions, and tenant configurations.
What could come next
The new ownership structure has been presented publicly as an investment partnership with plans tied to expanded computing capacity. Industry reporting around the acquisition has referenced a stabilized operating footprint with potential additional megawatt expansion, which would position the building as a larger “edge” facility serving regional enterprise and cloud needs.
Location advantage: Proximity to downtown fiber routes, major highways, and regional carriers supports connectivity-driven tenants.
Physical constraints: Retrofitting older structures for high-density computing can require substantial upgrades to power distribution and cooling.
Market implications: The sale adds to evidence that Minneapolis’ most valuable downtown transactions increasingly center on specialized infrastructure rather than conventional office leasing.
The transaction highlights a widening split in downtown real estate outcomes: buildings optimized for computing and connectivity can command premium pricing even as traditional office valuations remain under pressure.