Spotlight On: Matt Rauenhorst, President & CEO, Opus Development Company LLC
December 2024 — In an interview with Invest:, Matt Rauenhorst, president and CEO of Opus Development Company LLC, discussed the company’s recent milestones, market trends, and strategic outlook within the Twin Cities’ commercial real estate sector.
Reflecting on the past year, what have been some of the main highlights and key milestones for Opus?
Opus has achieved several significant milestones in the last year. One of the most notable is the start of a new project in the Twin Cities market: a build-to-suit facility for BAE Systems, a defense contractor, in Maple Grove. This project will serve as a new regional headquarters for BAE Systems, enabling them to operate more efficiently and continue driving innovation in their field.
This project began construction in 2024 and is set to be completed in September 2025. It’s a significant win for Opus and underscores our commitment to meaningful development in the Twin Cities.
In the past year, we’ve seen stabilization across our multifamily portfolio. Multifamily apartments are a key focus for us, and we’ve experienced strong leasing momentum, with stabilized occupancies in both downtown Minneapolis and St. Louis Park. This reflects the strength of the Twin Cities economy and job market, as well as the high quality of the assets we’re delivering: properties with designs and amenities that resonate well with renters.
What is your overall perspective on the state of the commercial real estate market in the Twin Cities?
Opus focuses primarily on two product types: industrial development and multifamily housing. Regarding industrial real estate, we’ve observed that while some U.S. markets have experienced oversupply in the last 12 months, the Twin Cities remain well-balanced. Supply constraints have kept deliveries of new industrial projects limited, while demand has stayed strong, maintaining equilibrium in the market. This balance gives us an optimistic outlook for 2025 and 2026, particularly for smaller industrial projects between 100,000 and 250,000 square feet in infill locations, which are highly sought after by tenants.
On the multifamily side, we’ve noted a slowdown in new starts, especially in the latter half of 2023 and throughout 2024. Rising development costs have outpaced rent growth, making new projects challenging. However, this dynamic has created a tighter rental market with declining vacancies, which we expect will drive rent increases into 2025 and support new multifamily developments in high-barrier-to-entry markets.
What do you see as the main opportunities for growth and investment for multifamily in the Twin Cities?
The biggest opportunities lie in creating more affordable options that meet the broader demand curve for multifamily renters. In recent years, most developments have targeted luxury renters, but the market now calls for more modest offerings — properties that are both high-quality and affordable for a wider range of renters. Developers who can deliver such projects will find strong demand. At Opus, we’re focused on finding opportunities to meet this need and provide alternative product types that cater to this shifting demand.
Would you describe the market as favoring buyers, sellers, renters, or landlords?
At the moment, it’s more of a renter’s market. However, we anticipate that as the supply of new properties remains limited and demand continues to grow, fueled by job growth and economic expansion, the market will shift to favor landlords. This transition is likely to occur over the next six to 12 months, with tightening conditions putting upward pressure on rents.
Beyond multifamily and industrial development, are there other areas or services that you see as growth drivers for Opus in the near term?
Opus has a 50-plus-year history of working with clients on construction projects, especially in the manufacturing sector. We’ve seen increasing opportunities in this area as domestic manufacturers expand or modernize their facilities. For example, we’re working with Spectral Alloy in Rosemount to upgrade their facility, which will enable them to expand their operations. This type of work not only drives growth for Opus but also supports broader economic and employment growth in the Twin Cities.
What differentiates Opus from other commercial real estate companies in the Twin Cities?
We recently completed a five-year strategic plan, and a key part of that process was identifying what makes Opus unique. The answer lies in our collaborative approach to delivering projects. Our ability to integrate architecture, design, engineering, development, and construction within one organization through our design-build model is a significant differentiator. This streamlined process allows us to deliver projects in a risk-adjusted manner that benefits our clients, partners, and stakeholders.
This in-house integration provides us with unique insights into market trends. Our construction team informs us about cost trends and evolving techniques, while our development team guides us on how to design buildings that meet current and future market needs. This dual perspective enables us to better serve our clients and deliver projects that stand out in the market.
Are you monitoring any regulatory or legal changes that might impact your work in the commercial real estate industry?
We closely monitor regulatory changes that could affect our projects. For instance, we’re currently paying attention to property tax adjustments, particularly in the downtown Minneapolis core, where valuation changes could impact development decisions.
On the industrial side, we’re watching for potential changes in tariffs and trade policies under a new administration. These could influence domestic supply chains and, by extension, the demand for industrial space. While we’re confident in overall demand, we remain vigilant about how these factors might shape the market.
How does Opus collaborate with city, county, and state officials to accomplish its development goals?
Opus has been headquartered in the Twin Cities for over 70 years, so building strong, long-term relationships with city officials is a priority for us. We approach every project as part of an ongoing relationship rather than a one-time interaction. This collaborative approach ensures that we align with the cities’ goals to create spaces where people can live, work, and thrive.
While we may not always agree on every step, we’re committed to finding compromises that benefit both sides and foster sustainable growth in the communities where we work.
Have you noticed any changes in what clients request regarding design, development, and construction in recent years?
In multifamily development, amenities have become increasingly important, particularly post-COVID. We’ve also seen a focus on adapting designs for e-commerce, such as creating efficient package delivery systems that cater to the growing demand for secure and convenient storage solutions.
In industrial development, the pace of change is remarkable. Design elements such as higher clear heights, stronger floor systems, and more advanced lighting and fire suppression technologies are evolving rapidly to meet tenants’ needs. Although industrial buildings may seem simple, they’re actually at the forefront of innovation in real estate design.
What is your outlook for the Twin Cities commercial real estate market over the next two to three years, and how does Opus fit into that picture?
The Twin Cities benefit from a stable economy driven by Fortune 500 companies, low unemployment, and steady job growth. We expect consistent growth across multifamily, industrial, and even retail sectors. Opus is well-positioned to capitalize on these opportunities through our integrated development and construction capabilities, ensuring we can meet market demands efficiently and effectively.
Opus has helped shape Minneapolis’ downtown skyline, and we are committed to and invested in supporting the city’s economic recovery. Downtown Minneapolis has faced challenges during this real estate cycle, and we aim to partner with other stakeholders to drive renewal and growth in this area. We believe in the Twin Cities market as a whole and want to contribute to its continued success.
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