MREJ February 2018 by REjournals

VOLUME 34, NUMBER 2

February 2018

Dayton’s Project Construction is Ramping Up

By Liz Wolf

ow that the Super Bowl is over, construction at the former Nicollet Mall Macy’s building in downtown Minneapolis – now dubbed the Dayton’s Project -- is kicking into high gear. It’s called the Dayton’s Project, because the building had been the headquarters and flagship store for the Dayton’s department store business for decades.

The iconic building opened its doors to visitors during Super Bowl Live, with its first floor used for everything from an NFL gift shop and the Hallmark Channel’s Kitten Bowl to a Prince exhibit and CNN’s live coverage desk. Visitors from across the country got a peek at the historic building’s unique spaces, reports Chicagobased Telos Group, a partner in the Dayton’s Project. Now that the Super Bowl has cleared out, it’s time to step up construction of the top-to-bottom overhaul. Redevelopment plans call for a mix of retail,

restaurants and a “high-energy” food hall – which signed on in December 2017—as well as office space. A team of brokers is marketing the space to local and national retailers, restaurants, entertainment concepts and office users. Demolition and abatement were underway months before the Super Bowl but will pick up significantly now that the first floor is empty, according to Telos. Construction crews will be working 24 hours a day reaching full production in late June with more than Dayton’s to page 10

New Co-Working Space in Downtown St. Paul Prioritizes Wellness Wellworth Focuses on Better Work Environments for Small Businesses and Independent Workers

he old Woolworth building in downtown St. Paul is transitioning to Class A office space and rebranding as The 428. The five-story, 60,000 squarefoot building, located at Minnesota Street and 7th Place East, recently announced its top-floor tenant, Well-

worth, a co-working space designed from the ground up to support wellness and productivity for members. St. Paulbased developer, Commercial Real Estate Services, is leading the project which is scheduled to open in July 2018. “Half of America’s workforce is

expected to be independent workers by 2020 and that doesn’t account for small businesses, all looking for a work environment that will help them thrive,” said Pat Wolf, owner, Commercial Real Estate Services. “Creating space for people to collaborate and build a community, while giving them a sound sense of wellness allows for endless innovation, collaboration and productivity.” Wellworth will offer approximately

7,200 square feet of indoor co-working space including individual workstations and collaboration space as well as beautiful rooftop patios. The space will have floor-to-ceiling windows and 360 degrees of natural light. Members will have access to a private outdoor co-working patio, open-air social gathering areas and a wellness Co-Working to page 14

February 2018

Minnesota Real Estate Journal

Contents

FEBRUARY 2018 • VOLUME 34, NUMBER 2

DAYTON’S PROJECT CONSTRUCTION IS RAMPING UP NEW CO-WORKING SPACE IN DOWNTOWN ST. PAUL PRIORITIZES WELLNESS

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Departments PEOPLE

NEWS

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EDITORIAL ADVISORY BOARD JOHN ALLEN Industrial Equities ROBERT ANGLESON Navigator Real Estate JEFF EATON Cushman & Wakefield MARK EVENSON Avison Young PATRICIA GNETZ US Bank TOM GUMP TAG Consulting CHAD JOHNSON Hellmuth & Johnson BILL WARDWELL Colliers International JEFFREY LAFAVRE IAG Commercial WADE LAU Founders Properties JIM LOCKHART WIPFLI DUANE LUND Exchange Realty CLINT MILLER Cushman & Wakefield DR. THOMAS MUSIL WHITNEY PEYTON MIKE SALMEN Transwestern

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Brian Helmken and Erik Heltne join Avison Young in Minneapolis Notable brokerage team joins Avison Young to build Twin Cities office agency leasing practice Mark Evenson, Avison Young Principal and Managing Director of the firm’s Minneapolis office, announced today the strategic hiring of veteran commercial real estate professionals Brian Helmken and Erik Heltne. Helmken becomes an Executive Vice President and Heltne a Senior Associate in the Minneapolis office. Working as a team, they will focus on new-business strategy and client services in the Twin Cities suburban office markets, and continue their successful track record in an office-sector brokerage capacity across a number of submarkets in the Twin Cities. “We are thrilled to land Brian and Erik. Their hiring marks another milestone for Avison Young’s Minneapolis office, as we expand our office-agencyleasing services in the Twin Cities. Brian and Erik have a long list of clients who appreciate the team’s impeccable professionalism, marketing and leasing savvy, and determined work ethic. What excites us the most is having two great guys with unimpeachable character become part of the Avison Young organization. We are looking forward to having their positive attitude impact our company, our customer base and our community.” Helmken brings to Avison Young 26 years of commercial real estate experience at CBRE. He has built a successful real estate practice concentrating in the suburban Minneapolis office market where he has managed both landlord representation and tenant representation projects. As a leading expert on the suburban Minneapolis office market, Helmken is also extensively involved in new-office-building development, site acquisition and site disposition. During his career, he has been involved in more than 5 million square feet of leasing and sale transactions with gross consideration in excess of $500 million. He holds a Bachelor of Arts degree in Urban Studies and Political Science from the University of Minnesota-Duluth. “I am looking forward with great anticipation to the next stage of my career at Avison Young, expanding the

office agency practice in Minneapolis. I also look forward to collaborating with my new colleagues in North America and building on the strong principal-driven, client-focused culture in place at Avison Young.” Heltne joins Avison Young after working at CBRE as an associate broker for six years. He started his real estate career at Cassidy Turley, working with tenants and landlords in the Minneapolis central business district. He holds a Bachelor of Arts in Marketing and Business Communication from the University of St. Thomas. “I am thrilled to be joining a firm that places such a strong emphasis on being both client-centric and culture-driven, and I am confident that our team’s industry relationships and experience will support the company’s growth objectives in the Minneapolis region,” adds Heltne.

Steve Schwanke named new NAIOP MN President NAIOP, the Commercial Real Estate Development Association, has named Inland Development Partner’s Steve Schwanke its 2018 Minnesota chapter President. Schwanke will build on recent successes to broaden and diversify membership and to refine and develop programs that appeal to and advance the goals of the NAIOP members. Schwanke is one of three founding partners at Inland Development Partners and has 30 years of industry experience. His focus is redevelopment and mixeduse projects with a particular emphasis

on large-scale development and complicated redevelopment projects. “Steve’s extensive background on complicated real estate development projects and longevity in the industry combined with his member-focused work ethic will help NAIOP grow and evolve well beyond 2018,” said Thomas J. Bisacquino, president and CEO of NAIOP Corporate in Herndon, Virginia. The Minnesota chapter’s efforts are focused on improving the professional lives of members by: • Providing networking opportunities to help members to develop relationships leading to more productive and enjoyable careers • Establishing educational opportunities through programming that allows members to broaden their knowledge and advance their interests • Informing members about legislation that impacts commercial real estate and the Minnesota businesses that are its tenants “I’m honored to take on this role and plan to create layered and varied opportunities for our member to learn, grow and connect,” says Schwanke. Prior to joining IDP, Schwanke worked at Westwood Professional Services and RLK Incorporated. Schwanke is a graduate of the University of St. Thomas Opus College of Business.

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Minnesota Real Estate Journal

News Dougherty Funding LLC closes $25.2 million loan for commercial property portfolio in North Dakota and South Dakota The Minneapolis office of Dougherty Funding LLC has closed a $25,225,000 loan to refinance a portfolio of 5 commercial properties located in Fargo, North Dakota, Grand Forks, North Dakota, and Sioux Falls, South Dakota. The five properties in the Portfolio total 222,945 SF. Dougherty Funding serves as lead lender and servicer for the loan.

MARCUS & MILLICHAP ARRANGES THE SALE OF GRAND MANOR APARTMENTS; A 36-UNIT APARTMENT COMMUNITY IN APPLE VALLEY, MN Marcus & Millichap (NYSE: MMI), a leading commercial real estate investment services firm with offices throughout the United States and Canada, today announced the sale of Grand Manor

Apartments, a 36-unit apartment property located in Apple Valley, Minnesota, according to Michael L. Glass, regional manager of the firm’s Minneapolis office. The asset sold for $3,150,000. Dan Linnell, Mox Gunderson and Josh Talberg (GLT Partners) investment specialists in Marcus & Millichap’s Minneapolis office, had the exclusive listing to market the property on behalf of the seller, a private investor and secure the buyer, also a private investor. Speaking with Mr. Linnell, “Grand Manor Apartments, a 36-unit property, was part of a multi-state, 197-unit apartment portfolio sale. Grand Manor was the last of the seller’s Minnesota apartment properties. This was sold in conjunction with a 160-unit complex, Morningside Apartments, in Sioux City, Iowa, that our team closed last week. Ultimately, both properties were acquired by two different buyers, both from the Twin Cities, who beat out local, regional, and national groups to win the bid on each property. Grand Manor Apartments is located at 7405 123rd Street West in Apple Valley; just 20 minutes south of Minneapolis-St.

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February 2018

Paul. Constructed in 1970, the property offers a multitude of layouts, including, one-, two-, and three-bedroom floor plans. The property is situated on 2.5 acres of land, with two detached garage buildings and additional off-street parking

Schafer Richardson Helps Church Find New Home in Oakdale, MN Schafer Richardson, Inc. is pleased to announce that it successfully represented the Lord’s Church of Minnesota in securing space in the Crossroads on Hadley building located 7013-7049 6th Street in Oakdale, Minnesota. Erin Larson represented the tenant in the transaction, and Mark Young represented the building owner. Crossroads on Hadley is a 56,785 square foot office/warehouse building, recently acquired by Crossroads Properties.

CBRE Hotels Closes Sale of 141-Room DoubleTree by Hilton Hotel Near the University of Minnesota

CBRE Hotels has arranged the sale of the 141-room DoubleTree by Hilton hotel in Minneapolis near the University of Minnesota campus. Nate Sahn, Pravin Boteju, and James Foxx with CBRE Hotels represented the seller, led by Nick Walton of Reuter Walton Companies and CPM Development. Located at 511 Huron Boulevard Southeast in the Stadium Village district near the University of Minnesota, the DoubleTree by Hilton Minneapolis – University Area is a five-story full-service hotel catering to campus visitors and the University Health Clinics and Surgery Center located across the street. Completed and opened in April 2017, the hotel offers views of TCF Bank Stadium and is blocks from the Stadium Village Green Line light rail station and Washington Boulevard, which offers numerous retail and dining options. The hotel also features underground parking and 6,000 square feet of restaurant and meeting space. “The DoubleTree Minneapolis University Area is a beautifully-designed hotel that will benefit from stable

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demand from the university campus and the greater Minneapolis area,” said Mr. Sahn, Executive Vice President. “This transaction is a testament to the growing investor interest in Minneapolis and university markets.” CBRE Hotels is a specialized team within CBRE providing advisory, capital markets, investment sales, research and valuation services to companies in the hotel sector. CBRE Hotels is comprised of more than 385 dedicated hospitality professionals located in 60 offices across the globe.

Westwood's Minneapolis Office Relocates Westwood Professional Services, Inc. (Westwood) relocated its corporate headquarters and Minneapolis office to 12701 Whitewater Drive, Suite 300, Minnetonka, 55343, approximately three miles north of its previous location. With 50,000 SF, the new office provides space for the firm’s anticipated growth and additional opportunities to expand in the future. Utilizing an open floor plan, multiple ad hoc meeting spaces, and soon-to-be launched internal

Minnesota Real Estate Journal

companywide digital signage system, staff and clients will experience better collaboration opportunities and flexible work spaces. Jason McCarty, Vice President of Operations, says, “Our office is a fresh, open environment that gives us room to grow and really showcase our culture. We are very excited to share it with our clients and friends.” McCarty shares that the firm signed an 8-year lease. The firm’s new address is 12701 Whitewater Drive, Suite 300, Minnetonka, MN, 55343.

Dougherty Funding LLC closes $32.6 million loan for Sioux Falls cold storage warehouse The Minneapolis office of Dougherty Funding LLC has closed a $32,620,000 construction loan for a to-be-built frozen/cold storage warehouse that will be located on a 54 acre site in Foundation Park in Sioux Falls, South Dakota and will contain approximately 200,000 SF of building area. The 54 acre site will allow expansion of the building to over 800,000 SF. The financing was

arranged for Win Build, LLC and Win Chill, LLC. Dougherty Funding serves as lead lender and servicer for the loan.

MARCUS & MILLICHAP ARRANGES THE SALE OF 615 HALL AVENUE A 20UNIT APARTMENT BUILDING IN SAINT PAUL Marcus & Millichap (NYSE: MMI), a leading commercial real estate investment services firm with offices throughout the United States and Canada, today announced the sale of 615 Hall Avenue, a 20-unit apartment property located in Saint Paul, Minnesota, according to the firm’s Minneapolis office. The asset sold for $1,390,000. Dan Linnell, Josh Talberg, Mox Gunderson and Evan Miller (GLT Partners), investment specialists in Marcus & Millichap’s Minneapolis office, had the exclusive listing to market the property on behalf of the seller, a private investor and secured the buyer, also a private investor. Speaking with Mr. Miller, “This offering attracted the attention of a broad

February 2018

spectrum of buyer types; offers came in from locally based groups, regional and national capital. This trend has continued to strengthen over the last few years with outside capital influencing prices and a property’s marketing strategy. Investors saw potential for additional rent increases in an area that is seeing positive signs, resulting from outward growth from revitalization of Downtown Saint Paul.” 615 Hall Avenue is located in the Riverview neighborhood of Saint Paul, Minnesota. Constructed in 1969, this all brick exterior, garden-style building features 16 one-bedroom/one-bath, and four two-bedroom/one-bath apartment homes. Each one-bedroom unit is approximately 700 square feet and each two-bedroom unit approximately 775 square feet.

Dougherty Funding LLC arranges $54.1 million loan for Market Street Redevelopment The Minneapolis office of Dougherty News to page 15

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Minnesota Real Estate Journal

February 2018

Dayton’s From page 1

300 on-site construction workers. The retail floors will open to the public in fall 2019, while the office space is expected to be ready first-quarter 2019. “We’re very excited about it,” says Tricia Pitchford, senior vice president of leasing at Mid-America Real EstateMinnesota, who’s heading the project’s retail leasing. “We’ve had such positive feedback – not just locally – but nationally. People are really excited about his project. They’re talking about it, looking forward to what we can do to redevelop that whole block.” How the project came to be New York-based 601W Cos. purchased the 12-story, former Macy’s building – at 700 Nicollet Mall -- in March 2017 for $59 million. It’s the company’ first Twin Cities’ acquisition. The property is actually three connected buildings totaling approximately 1.2 million square feet. 601W is partnering with Minneapolis-based developer United Properties, the Telos Group and Mid-America Real Estate. Transwestern Minneapolis is handling the office leasing, and Gensler is the lead architect.

“601W had not done a prior project in Minneapolis, and I think they believed they would benefit from having a local, experienced partner who actually is officed downtown and is very invested in the downtown community, so it was a great fit for both parties,” says Bill Katter, president and chief investment officer of United Properties. “It’s just such a landmark property that we felt we had a responsibility to help give the project direction.”

Bringing life back to the building, Nicollet Mall 601W and its partners will invest $250 million for a complete makeover of the property with the goal of making it downtown’s center of retail once again. 601W is preserving as many of the iconic features of the building as possible. That includes maintaining the exterior, the first-level JB Hudson jewelry space, and the art-deco bathrooms on the fourth floor. The building’s basement, street level and skyway level -- totaling roughly

250,000 square feet -- will be home to retailers, restaurants, entertainment concepts and the food hall. Floors three through 12 will be retrofitted into offices totaling 750,000 square feet that will offer massive floor plates. “The Dayton’s Project is a once-ina-lifetime property, “says a Telos spokesperson. “The largest downtown floor plates, historic features, central urban location, and lasting place in the memories of generations of MinDayton’s to page 12

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Minnesota Real Estate Journal

February 2018

Dayton’s from page 11

nesotans make it a highly acclaimed building. We are enjoying leveraging the uniqueness of this building to bring to life the most connected office and retail property in Minneapolis.” Project lands food hall as first tenant Andrew Zimmern, a four-time James Beard Award-winning chef and creator, producer and host of the Travel Channel’s “Bizarre Foods,” will open a two-level, 40,000-square-foot food hall concept as the project’s first tenant. Zimmern is partnering with Robert Montwaid, co-founder of Gansevoort Market in New York City. Zimmern envisions the food hall as a “mix of well-known food vendors, local treasures, fresh food purveyors, and food makers creating a market that will be the first of its kind in the Twin Cities,” according to a release. It will be called The Dayton’s Food Festival & Market Place. “There is so much energy around this project and this building, that it’s a thrill to continue the Dayton’s legacy by contributing innovative ideas around food,” Zimmern said in the release. “This will be the catalyst that will set the Dayton’s Project up to be the first visitor stop, the complete retail destination downtown that Minneapo-

lis so desperately needs,” says Erin Wendorf, a principal at Transwestern Minneapolis, who’s leading the project’s office leasing. In addition to the food hall, the retail leasing team is looking for other “experiential retailers” to create a downtown destination. “The food hall is an experience that will draw people to this piece of real estate not only during the busy workday but also on nights and weekends, so it will become a destination for downtown,” Katter says. “There are

plenty of other examples of experiential retailing… We’re not talking to the group Pinstripes, but something like a Pinstripes or a Punch Bowl Social could be some type of experiential use there.” Project looks to add additional retailers/restaurants The redeveloped building will also offer a mix of restaurants, clothing stores and boutique shops. “Food and entertainment seems to be where all of the activity is right now,”

Pitchford says, “but fashion is absolutely another component that we want to have in the project. We’re reaching out to various fashion and hard goods retailers that aren’t necessarily in our market yet. We’re receiving really positive feedback from around the country from groups that have had Minneapolis on their radar and don’t know that much about it.” Pitchford says “all of the stars are aligning for Minneapolis” when looking at its demographics, the construction of downtown residential units, and

February 2018

daytime population. “You pull all those things together, and we’ve had a lot of groups say to us, ‘Why isn’t there more downtown right now?” Pitchford says. “So we believe it’s the right project at the right time. We’re able to deliver a huge block of space and plan around how we want the experience to happen for the consumer.” Pitchford says the goal is to make the Dayton’s Project a downtown destination again, and not just bring those people living or working downtown into the project, but also people in the suburbs wanting a reason to come back downtown. “Twenty years ago they would come downtown, but there hasn’t been anything for them in the last couple of decades,” she says. “Our goal is to really bring them back. They’re comfortable with the building. They know how to get in and out of the building, and so we’re trying to appeal to a broader audience and activate Nicollet Mall and downtown retail by keeping it busy on nights and weekends.” Project looks to attract big companies with its unique office space, cool perks The next step is finding tenants for the large office spaces on the building’s top nine floors. Single floors could accommodate up to 90,000 square feet

Minnesota Real Estate Journal

of contiguous space, which is extremely unusual in the office marketplace. “We believe this is a huge opportunity for potential tenants to have creative and collaborative office spaces,” says Transwestern’s Wendorf. “The Dayton’s Project offers a significant benefit to large organizations that are looking for a more collaborative culture. Rather than a 90,000-square-foot user being divided onto five floors like they would have to be in most office buildings

downtown, all employees in a space that size can be on one floor, further increasing the opportunity for collaboration [and] employee engagement… that have been shown to lead to improved innovation.” The seventh floor will feature stateof-the-art amenities for the office tenants including a 10,000-square-foot gym with showers/lockers, a “library” for quiet work, and an indoor lounge connected to a large rooftop terrace.

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Wendorf says her team is working with prospective office tenants. “We have well over 1 million square feet of prospects at various stages for the office portion of the project,” she says. “As we suspected, the majority are high-caliber national or global organizations that understand the tremendous value that investing in the right location and the right office environment can have on overall business performance.”

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Minnesota Real Estate Journal

February 2018

Co-Working From page 1

room. The building hopes to have a fitness studio in the lower level and will offer showers and yoga and fitness classes on the roof when weather permits. Wellworth is located in the heart of downtown St. Paul, within walking distance of restaurants, sporting events, a grocery store and other attractions. It offers skyway-access to parking garages, bike storage, proximity to light-rail transit and a stop on a major bus lines. Wellworth will offer multiple membership options ranging from monthto-month freelance options to private office space. There will be space to accommodate up to 120 members at any given time. Commercial Real Estate Services is working with the Minneapolis office of HDR, Inc. as the architect for the base building and general contractor McGough Construction. The interior architect for Wellworth is Gensler. First to LEED and WELL The 428 is the first building in Minnesota to seek both WELL Core and Shell and LEED Silver certification. WELL certification identifies seven

key features that improve personal health and well-being: air, water, nourishment, light, fitness, comfort and mind. To meet WELL Core and Shell certification, The 428, including Wellworth, will focus on enhancements such as filtered recirculated air, filtered water at all fountains, kitchenettes and showers, natural light management and bicycle storage to name a few.

LEED Silver certification focuses on building practices that are environmentally sustainable by efficiently using resources during design, construction and operation. As part of that effort, 88.53% of The 428â&#x20AC;&#x2122;s construction materials are recycled. The intersection of co-working and wellness

Wellworth will incorporate wellness and environmental considerations in construction and design to create an environment that helps decrease stress, improve health and increase productivity. In addition to the amenities workers have come to expect in co-working Co-Working to page 18

February 2018

Minnesota Real Estate Journal News from page 8

Funding LLC has arranged $54,100,000 in construction financing for the Market Street redevelopment in the 50th and France neighborhood of Edina, Minnesota. The joint venture between Buhl Investors and Saturday Properties will develop 100 units of condominium quality luxury rental apartments, approximately 33,000 square feet of street level retail, 271 stalls of underground parking, and a community plaza. Dougherty Funding served as placement agent for the loan.

CBRE Sets Deadline for Offers on 143-Acre Ford Site Redevelopment Opportunity in St. Paul, Minnesota CBRE, on behalf of Ford Motor Company, will seek offers from developers for the 143-acre former Ford Motor Company assembly plant site along the Mississippi River in St. Paul, Minnesota. With new zoning in place, all demolition of the assembly plant completed and the environmental

remediation to be finished soon, the Ford site is among the best current mixed-use development opportunities in the market today. In the years since closing the auto assembly plant, Ford cooperated with the City of St. Paul to envision a future for the site while preparing the land for redevelopment. Richard Palmiter, Brian Pankratz and Steve Lehr with CBRE Land Services began marketing the site for sale in December, aiming to reach developers experienced in a wide spectrum of asset types on a local, regional, national or global scale. CBRE has received considerable interest from the development community and will seek offers, due by February 23, 2018, from interested parties with a vision for the site. The zoning framework for the site calls for a new mixed-use urban neighborhood on the banks of the Mississippi River that will provide a unique and attractive live, work and play environment. The Ford site opportunity offers an array of redevelopment prospects including apartments, condominium,

townhomes, senior housing, student housing, hotel, office and retail located within the affluent and trendy Highland Park neighborhood. “The Ford site is an unparalleled opportunity to build a new, modern community within a fully built-out urban environment. We anticipate hearing more from developers that will build upon the new framework the City of St. Paul recently put in place,” said Mr. Palmiter, a CBRE Vice President. “Our client is committed to considering offers from capable developers that will recognize the full potential of this exciting property.”

Dougherty Mortgage LLC closes $30.6 million Fannie Mae loan for Residences at 1700 Dougherty Mortgage LLC, a full service national mortgage banking firm, recently closed a $30.6 million Fannie Mae loan for the refinancing of Residences at 1700, a 115-unit market rate multifamily apartment property located in Minnetonka, Minnesota.

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The property offers convenient on-site retail for access to restaurants, coffee and banking. The 12-year loan has a 30-year amortization schedule and was arranged through Dougherty’s Minneapolis office for borrower 1700 Plymouth LLC.’

Timberland Partners Announces the Closing of Financing for Green on Fourth Apartments in Minneapolis, MN Timberland Partners, a privatelyowned real estate investment, development and management firm, announced that it has closed on the land and financing needed to begin construction on Green on Fourth Apartments (G4) located in Minneapolis, near the University of MinnesotaTwin Cities campus. The $53.8 million, 243-unit mixedincome project is a joint venture between Minneapolis-based developers Timberland Partners and Prospect Park Properties. The project was designed by Tushie Montgomery

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Architects and will be constructed by Frana Companies, both based in Minneapolis. Dougherty Mortgage LLC arranged a $42.7 million HUD-insured 221(d)(4) loan. Additional financing was also provided by Hennepin County, the City of Minneapolis, and the Metropolitan Council. Ryan Sailer, Vice President of Development, commented that “the development of mixed-income transit orientated housing is very challenging. This project involved a very unique financing structure that was only possible because of the strong public-private partnership between us and our funders. We are very appreciative of everyone’s efforts, and hope it can serve as a model for future mixed-income development.” G4 is immediately adjacent to the Prospect Park Light Rail Station, which sits on the Green Line that connects the downtowns of Minneapolis and Saint Paul. As part of the project, Timberland Partners plans to preserve public green space near the transit station area and will be coordinating with the City of Minneapolis, Hennepin County, and the

Minnesota Real Estate Journal

Metropolitan Council on the reconstruction of "Green Fourth Street" which fronts the project. Once complete, Fourth Street will incorporate an innovative design that includes sidewalk furniture, bike lanes, decorative pedestrian lighting, and non-native plant vegetation in an attempt to connect G4 and all other new development to the public realm in an inviting and interactive way. Location is only one aspect of G4's sustainable design, it will also be connected to a first-of-its-kind district stormwater system. This project also utilizes construction strategies that allow for further sustainable energy initiatives in the future. Building amenities include a rooftop deck with views of the Minneapolis skyline, fitness center, yoga studio, community room with a pub-style lounge and game room, package center, heated underground parking with bike storage, playground, and dog run. Apartment homes range from studio, one, two, and three bedrooms with penthouse options. Homes will feature granite countertops and vanities, fully equipped kitchens with tile backsplashes, in-unit washer

and dryer and private balconies. Master bedrooms include walk-in closets and kitchens will come with built-in USB charging ports. Construction completion for Green on Fourth is scheduled for June 2019.

CBRE to Lease and Manage Paster Properties’ Twin Cities Portfolio Paster Properties will focus on acquisition and development. CBRE announced today a strategic partnership with Paster Properties to provide leasing and management services for the family-owned company’s portfolio of retail and mixed-use assets in the Minneapolis-St. Paul area. For over 70 years, Paster Properties has been connecting retailers with community demand through development and ownership of neighborhood retail centers in the Minneapolis-St. Paul area. Over the past several years, Paster Properties has shifted its focus to new development, redevelopment of existing assets and acquisitions of retail and

February 2018

mixed-use properties. “This strategic partnership will allow us to grow and focus our efforts on acquisition and new development while giving us access to a best-in-class real estate services provider,” said Howard Paster, President of Paster Properties. “We are excited to partner with CBRE and provide our current employees an opportunity to learn and grow through CBRE’s market-leading client services platform, and real estate market expertise.” Paster Properties’ portfolio consists of prominently-located community and neighborhood shopping centers in both urban and suburban environments including Minneapolis, St. Paul, Edina, Lakeville and Roseville. The diverse portfolio includes established centers and new development projects with a mix of national and local tenants. “For more than three generations, Paster Properties has built an incredibly diverse and successful portfolio of properties in the Minneapolis-St. Paul area. We are excited to partner with the Paster team on a comprehensive suite of leas-

January 2017

ing and management services that will allow Paster to focus on finding additional opportunities in our market,” said Blake Hastings, Managing Director, CBRE Minneapolis/St. Paul. CBRE’s Rob Wise and Charlie Hexum will oversee leasing. Dan O’Neill, CBRE’s Managing Director for Asset Services, will assemble a team of current Paster employees and CBRE employees to provide day-today management of the properties in the portfolio.

Dougherty Mortgage LLC closes $42.8 million HUD loan for Green on Fourth Apartments Dougherty Mortgage LLC, a full service national mortgage banking firm, recently closed a $42.8 million HUD 221(d)(4) loan for the new construction of Green on Fourth, a 243unit mixed income multifamily development located in the Prospect Park neighborhood of Minneapolis, Minnesota. Of the 243 units, 177 units will

Minnesota Real Estate Journal

be market rate, 49 units will be restricted at 50% of AMI, and 17 units will be restricted at 60% of AMI. Other sources of funding include AHTF and LCDA Loans from the City of Minneapolis and TOD Funds from Hennepin County. The 40-year HUD 221(d)(4) loan, with 40-year amortization schedule, was arranged through Dougherty’s Minneapolis office for borrower G4 Partners, LLC.

MARCUS & MILLICHAP ARRANGES THE SALE OF COBBLEHILL APARTMENTS A 36-UNIT APARTMENT BUILDING Marcus & Millichap (NYSE: MMI), a leading commercial real estate investment services firm with offices throughout the United States and Canada, today announced the sale of Cobblehill Apartments, a 36-unit apartment community located in Bloomington, Minnesota, according to Craig Patterson, regional manager of the firm’s Minneapolis office

Abe Roberts, Mox Gunderson, Dan Linnell, and Josh Talberg (GLT Partners) investment specialists in Marcus & Millichap’s Minneapolis office, had the exclusive listing to market the property on behalf of the seller, a private investor and secured the buyer, a private investor. Speaking with Mr. Roberts, “Cobblehill Apartments is a unique, very well-kept apartment community located in the Oxboro neighborhood of Bloomington. The property generated tremendous interest among the investment community. This property is a real gem, and the marketplace for good, quality apartment investment opportunities is quite strong. Ultimately, we had 25 qualified tours and 13 written offers. The final sale price came to more than 10 percent above initial list price.” Cobblehill Apartments is located at 200 West 97th Street in Bloomington, Minnesota. The unit mix consists of four studio, 26 one-bedroom, and eight two-bedroom units.

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MARCUS & MILLICHAP ARRANGES THE SALE OF MOUNT ROYAL MANOR; A 114-UNIT APARTMENT BUILDING Marcus & Millichap (NYSE: MMI), a leading commercial real estate investment services firm with offices throughout the United States and Canada, today announced the sale of Mount Royal Manor, a 114-unit apartment property located in Duluth, Minnesota, according to Michael L. Glass, regional manager of the firm’s Minneapolis office. The asset sold for $10,900,000. Mox Gunderson, Dan Linnell, Josh Talberg and Chris Collins, (GLT Partners) investment specialists in Marcus & Millichap’s Minneapolis office, had the exclusive listing to market the property on behalf of the seller, a limited liability company and also secured the Buyer. Speaking with Mr. Gunderson, “Mount Royal is a vintage 1950’s midrise building located adjacent to the

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Minnesota Real Estate Journal

University of Minnesota Duluth campus. From the 8th floor penthouse apartments you can watch a U of M Bulldog football game on your deck and, at halftime, walk to your living room and see sail boats on Lake Superior. The property received interest from across the country, from both market rate and student housing operators, as well as developers intrigued by the amount of land available in the offering. Mount Royal

We provide quality pavements enhancing property values. Parking Lots • New construction • Reconstruction • Expansion • Overlay Pavement Maintenance • Drainage Corrections • Concrete Repairs • Cracksealing • Sealcoating • Patching

was near 100% occupancy at the time of sale.” Mount Royal Manor is located at 100 Elizabeth Street in Duluth, Minnesota. The property is comprised of 13 studios, 76 one-bedroom, and 25 two-bedroom apartments. Built in 1951, the concrete building sits on 4.3 acres and is walking distance to numerous area retailers and attractions.

Bituminous Roadways, Inc.

651.686.7001 www.bitroads.com

Co-Working from page 14

spaces, Wellworth will provide features that focus on improving the well-being of its members. Wellworth will offer branded amenities called Wellements, which will include healthy snacks, chair massage, an indoor water feature and a botanical green wall. A study done by the University of Technology, Sydney, in 2010 found that plants in a workplace can reduce tension and anxiety by 37%, depression by 58% and fatigue by 38%. “Co-working continues to accelerate employee expectations as well as bringing new opportunities for corporate real estate,” said Cassandra Griep, design director at Gensler Minneapolis. “The trend is taking shape in new markets such as St. Paul. Wellworth is leading by bringing options for individuals and groups as to how they will work with a focus in wellness in the work environment – a direct response to the concerns of today’s working generations.” Wellworth also will be equipped with the expected amenities of a coworking space, including conference rooms with HDTV monitors, high-

February 2018

speed internet, stand-up desks, mail lockers and more. Playing on its history The Wellworth name pays homage to the previous tenant, the 1950s Woolworth store, while speaking to its focus on offering a wellnessfocused environment and community. Developers are working to honor the rich history of the building while creating space designed for modern day innovation, collaboration and business growth. The developers also plan to incorporate features from the past into the building including signage, fixtures and hope to keep Woolworth’s lunch counter on the building’s ground floor. To learn more about Wellworth, visit www.WellworthCoWork.com or call 612-326-7682 to find out about membership options. If you’re interested in learning more about leasing options for The 428, call 651-290-8890 or email info@the428.com.

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