Penny’s Coffee joins Linden Hills’ busy retail district

A former auto shop at 44th & Beard now holds co-working spaces, Penny’s Coffee, and the BlackBlue boutique in the basement.
A former auto shop at 44th & Beard now holds co-working spaces, Penny’s Coffee, and the BlackBlue boutique in the basement.

The old Southwest Motor building is buzzing at 44th & Beard. On a recent Friday, patrons ordered from a menu of salted honey butter crepes and lattes with house-made almond milk. Down the stairs, the new BlackBlue boutique displayed men’s sweaters and jackets. Co-working spaces stood available to rent behind a glass partition. The partners behind Penny’s Coffee — Adam Roozen (of Echidna), Ben Hertz (of CAMA and Benjos) and Congressional candidate Dean Phillips (formerly of Phillips Distilling Co.) — took meetings in glass-walled conference rooms.

Photo by Eliesa Johnson
Photo by Eliesa Johnson

Open since the summer, Penny’s Coffee is one of the newer retail offerings in Linden Hills, and it’s been busy. Seeing lines out the door, Andrew “Scooter” Zajac said he’s spent time refining the menu so every food order can pop out in three minutes.

“It’s got to be like street food,” he said.

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A 2016 study of commercial market conditions by Perkins + Will found less than 5,000 square feet of vacant retail space in Linden Hills, out of a total 96,000 square feet of retail.

“5,000 is not a lot of vacant space,” said Jay Demma, a senior planner at Perkins + Will. “As a general rule, a healthy retail environment will probably have 5-10 percent of its space vacant.”

Quoted retail asking prices fell into the study’s highest category at more than $25 per square foot, although Demma noted that figure might be skewed by few available spaces. At least a dozen of the neighborhood’s retail buildings pulled building permits to make improvements from 2010-2015, with at least three properties investing $1 million or more. Several retail properties increased significantly in value between 2010 and 2015, seeing estimated market value increase more than twice the aggregated citywide rate of change for retail properties. Some retail property values saw the dramatic valuation increase without new building permits.

New retail in Linden Hills includes the dpHUE salon, located in the former Erskine Interiors building at 44th & France. Martina is now open in the former Upton 43 restaurant space. France 44 invested in an extensive remodel of its premises. New retailers at the Linden43 apartments at 43rd & Upton include Mint Orthodontics and the forthcoming Copilot Dog Outfitters. Construction is underway on a yet-to-be-announced retailer across the street at the southwest corner of 43rd & Upton.

Although Linden Hills’ retail district is small when compared to other Minneapolis districts, investors have noticed the neighborhood’s buying power. A memo by North Star Retail Group reported the 2016 average household income within one mile of Penny’s Coffee is $175,496. Also according to the memo: 23.6 percent of people within one mile of Penny’s drink four cups of coffee per day.

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Penny’s Coffee is responding to demand by expanding into the basement this month to provide more seating for patrons. A new super-automatic espresso machine churns out drinks in under a minute. And Penny’s Studio co-working desks and offices are available to rent at rates starting at $750 per month.

Zajac said they hope to find office tenants who are a good fit and stay in the building long-term.

“It’s kind of like living in a neighborhood,” Zajac said. “You want to know your neighbor.”

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