MREJ July 2017 by REjournals

VOLUME 33, NUMBER 6

July 2017

Vikings Kick Off Marketing of 160 Acres Around New Eagan HQ/Practice Facility

Vision calls for a live/work/play ‘Vikings destination’ By Liz Wolf

hile construction of the Minnesota Vikings’ new team headquarters and practice facility

in Eagan is well underway, the Vikings also announced the marketing launch of Viking Lakes, a high-profile, 3.25 million-square-foot, masterplanned development that will be built around the team’s new facilities. MV Eagan Ventures –a company controlled by Vikings owners Zygi, Mark and Leonard Wilf – purchased 200 acres of land on the site of the former Northwest Airlines headquarters near the intersection of I-494 and Dodd Road. The Wilfs are seeking to develop the planned 200-acre Viking Lakes com-

munity with corporate office, retail, hospitality, multifamily residential, a medical office building and sports medicine center. MV Eagan Ventures hired New York-based Newmark Knight Frank to handle the global marketing. The firm has set up a Minneapolis office. John McCarthy, who joined NKF as senior managing director, is taking the lead on Viking Lakes. The Wilfs are envisioning up to 1 million square Vikings to page 14

The futuristic banker: Strengthening the human element in business in a technologically advanced society Sam Isaacson, Assistant Vice President | Bridgewater Bank There’s an app for that Instagram has made everyone a “professional” photographer these days. Filters and unique settings provide the right tools to master this trade. Like Instagram, advancements in the business banking sector have

Isaacson

allowed individuals to be their own business banker. You can deposit a rent check while enjoying a nice cocktail on Stella’s Fish Cafe rooftop or send a Bill Payment to a contractor while on Lake Minnetonka.

One might ask, why do banks have brick and mortar branches anymore? Business entrepreneurs and real estate professionals are able to handle their day-to-day banking all on one mobile device, but there is still a growing demand for genuine relationships with an actual human, not a hologram. Bankers to page 20

For More Information and Registration

www.mrej.com/eastsub ROI in the East (Retail, Office & Industrial) Moderator: Herb Tousley, University of St Thomas Jon Whitcome, Metro East Commercial Real Estate Chris Weirens, Cushman Wakefield/Northmarq • How are the Retail, Office and Industrial markets doing in the East side today • What current projects in each specific segment are happening • What are some new or future developments in the works • Future trends for ROI • Western Wisconsin update on segments in the industry

Washington County Development Update Moderator: Chris Eng, Washington County Dan Hebert, Gaughan Companies Dwight Picha, City of Woodbury Brian Zeller, Greystone Aaron Parrish, City of Forest Lake • New opportunities for development is happening in the east suburbs right now • What types of projects are in consideration for development? • What are the challenges with development vs. redevelopment? • Who is active in the market place and what is their risk tolerance and expected returns • When or will there be a next wave of development and where?

Healthcare and Medical Properties Development Moderator: Janelle Schmitz, City of Woodbury Jill Rasmussen, The Davis Group Matt Alexander, Krause-Anderson Development • Healthcare and Medical property Development in the East Suburbs • City of Woodbury and its role on development and medical properties • City Place Development High quality class A multi tenant medical office Building • Is Woodbury a healthcare destination of the East Metro?

East Suburban Residential Real Estate Market Update Moderator: Christine Berger, Minnesota Realtors Todd Polifka, Custom One Homes John Rask, M/I Homes Jim Young, Edina Realty • State of the Industry – Overaview of existing market • Market trends – Homes sales analysis year over year – what is selling and why • What do outside investors see as opportunities in the East suburbs • Projects that are impacting housing in the East suburbs – infrastructure and other • New Real Estate Development – Where is it happening & Why

East Suburban Economic Outlook Tim O’Neil, DEED • Major economic indicators that will impact your business • Economic Outlook for east suburban real estate sector • Residential Construction and Home Building Outlook • How the East Suburbs Economy compare to the rest of the state • Future outlook and 2018 Economic Forecast for the east side

To become involved in upcoming events, Please contact:

Jeff Johnson

Jay Kodytek

952.405.7780 jeff.johnson@resummits.com

952.405.7781 jay.kodytek@resummits.com

July 2017

Minnesota Real Estate Journal

Contents

JULY 2017 • VOLUME 33, NUMBER 7

VIKINGS KICK OFF MARKETING OF 160 ACRES AROUND NEW EAGAN HQ/PRACTICE FACILITY THE FUTURISTIC BANKER: STRENGTHENING THE HUMAN ELEMENT IN BUSINESS IN A TECHNOLOGICALLY ADVANCED SOCIETY

ENHANCING WORKPLACE CULTURE THROUGH CONNECTIONS WITH NATURE

Page 3

Departments PEOPLE

NEWS

Minnesota Real Estate Journal (ISSN 08932255) Copyright © 2017 by the Minnesota Real Estate Journal is published for $85 a year at 12 times per year by Jeff Johnson, 13700 83rd Way North, Suite 206, Maple Grove, MN 55369. Monthly Business and Editorial Offices: 13700 83rd Way North, Maple Grove, MN 55369 Accounting and Circulation Offices: Jeff Johnson, 13700 83rd Way North, Maple Grove, MN 55369 Call 952-885-0815 to subscribe. For more information call: 952-885-0815. Periodical postage paid at Maple Grove and additional mailing offices. POSTMASTER: Send address changes to Minnesota Real Estate Journal, 13700 83rd Way North, Suite 206, Maple Grove, MN 55369 ©2017 Real Estate Publishing Corporation. No part of this publication may be reproduced without the written permission of the publisher.

Page 4

Minnesota Real Estate Journal

July 2017

People

13700 83rd Way N, STE 206 Maple Grove, MN 55369 For information call 952-885-0815

President | Publisher Jeff Johnson jeff.johnson@resummits.com Associate Publisher Jay Kodytek jay.kodytek@resummits.com Consulting Editor Dr. Tom Musil tamusil@stthomas.edu Conference Manager | Art Director | Graphic Designer | CE Specialist Alan Davis alan@resummits.com

Dominium Hires Noah Wagner as Development Staff Associate Dominium, a leading apartment development and management company, announced that it has hired Noah Wagner as a development staff associate. In his new role, Wagner researches real estate markets, underwrites potential projects and works to obtain tax credit financing. Prior to joining Dominium, Wagner was a development intern at T. Wall Enterprises where he assisted with creating financial models and finding possible development opportunities. He was also a realtor for a single-family community in Middleton, WI. Wagner holds a Bachelor of Business Administration in real estate from the University of Wisconsin - Madison. He is a member of the Wisconsin Real Estate Alumni Association. Wagner enjoys reading, biking, kayaking and hammocking. He currently resides in Minneapolis, Minn.

EditoRial advisoRy BoaRd JOHN ALLEN Industrial Equities ROBERT ANGLESON Navigator Real Estate JEFF EATON Cushman & Wakefield/NorthMarq MARK EVENSON Evenson and Young PATRICIA GNETZ US Bank TOM GUMP TAG Consulting DAVID JELLISON Liberty Property Trust CHAD JOHNSON Hellmuth & Johnson BILL WARDWELL Colliers International JEFFREY LAFAVRE IAG Commercial WADE LAU Founders Properties MIKE LE JEUNE Fabcon JIM LOCKHART WIPFLI DUANE LUND Exchange Realty CLINT MILLER Cushman & Wakefield/NorthMarq DR. THOMAS MUSIL WHITNEY PEYTON

Dominium Hires Logan Schmidt as Staff Associate Dominium, a leading apartment development and management company, announced that it has hired Logan Schmidt as a staff associate. In his new role, Schmidt will work with project partners in analyzing new projects. He is also responsible for preparing financing and equity packages as well as assisting with design processes and construction management. Schmidt holds Bachelor of Science in Business Administration degrees in Finance, Investment and Banking and in Real Estate and Urban Land Economics from the University of Wisconsin – Madison. Schmidt currently resides in St. Paul, Minn.

MIKE SALMEN Transwestern

13700 83rd Way N, STE 206 Maple Grove, MN 55369 For information call 952-885-0815

Doran Grows Architecture Staff Adds Additional Architects to lead Design/Build Teams Doran Companies announced that Minnesota licensed architects Benjamin Lindau and Brian Pederson have joined their Architecture team as Senior Architects. The addition of Lindau and Ped-

erson increases Doran Architecture employees to a total of 26 with eight licensed architects and 18 additional designers and coordinators. Benjamin Lindau In Lindau, Doran has recruited an experienced architect who while at Ellerbe Becket and RSP Architects led design projects for major office and medical projects from Minneapolis, Rochester and Fargo to Seoul, South Korea, and United Arab Emirates. Lindau also managed design build contracts for key components of US Bank Stadium for Mortenson. A graduate of Ohio State University with a Bachelor of Architecture and the University of Minnesota with a Master of Architecture, Lindau is LEED BD+C certified and a member of the Minnesota Architectural Foundation board of directors. Brian Pederson With project experience including the iconic Carlyle Condominiums in Minneapolis, Best Buy’s World Headquarters in Bloomington and the White House exterior renovation, Brian Pederson brings an impressive resume to Doran Architecture. In addition, Brian’s previous experience at TSP, Inc., Opus Architects and Engineers and Cunningham Group includes an abundance of additional project experience designing healthcare, corporate office and educational facilities across the country. A graduate of North Dakota State University with a Bachelor of Architecture and a Bachelor of Science in Environmental Design, he is also very involved in this community where among his many volunteer activities is as a Habitat for Humanity Group Leader for five on-site building sessions.

SARA Investment Real Estate Names Vice President for the Minnesota Region SARA Investment Real Estate, a fullservice commercial real estate investment and brokerage company, is pleased to welcome Tony Phelps as its new Regional Vice President for the Minnesota region. Based in Minneapolis, Tony will concentrate on developing business relationships in the areas of brokerage, finance and investor rela-

tions, while leading the local market team to ensure efficient operation of the portfolio. Tony comes to SARA with over 20 years in the commercial real estate industry, holding previous roles with Ryan Companies US, Inc., Opus Development Company and Cresa as both a broker and developer, where he completed more than $750 million in real estate transactions. SARA first entered the MinneapolisSt. Paul market in 2015 and now owns five properties, including the historic, renovated Crown Center. “We’re thrilled to have Tony join SARA and lead our Minneapolis-based team,” said Ben Adank, Vice President of Business Development for SARA Investment Real Estate. “Our portfolio includes some unique properties in the Minneapolis-St. Paul market. We look forward to Tony and his team uncovering new opportunities for our investors; further expanding SARA’s footprint in the region.”

RYAN ARCHITECTURE AND ENGINEERING MAKES KEY HIRES IN HEALTHCARE SECTOR Johnson and McLane Bring 22 Years of Collective Experience to Healthcare Team Ryan A+E, Inc., Ryan Companies' architecture and engineering practice, announces the hiring of two key architects to their growing team. The addition of Alena (Sakalouski) Johnson and Adam McLane demonstrates the significant value Ryan Companies places on the healthcare sector by continuing to build upon their existing roster of strategic healthcare professionals in development, construction, architecture and real estate management. Alena (Sakalouski) Johnson, AIA, joins the team as Director of Architecture, Healthcare for Ryan A+E and will lead day-to-day operations of the healthcare design team. A member of AIA and co-chair of the Healthcare Architecture committee, Alena brings a depth of experience which includes work on Mother Baby Centers at United Hospital, Abbott Northwestern and People Section Continues to Page 21

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Minnesota Real Estate Journal

News

by the same person for nearly 40 years.

Gaughan Companies Purchases On Snelling Ave.

FirstService Residential Expands Twin Cities Portfolio with Acquisition of Paradise & Associates

Snelling Ave. at I-94 Will See New Development in 2018 St. Paul, MN – July 21, 2017 – Gaughan Companies, Commercial Real Estate Developer and General Contractor, closed on the purchase of 304-308 Snelling Avenue in St. Paul on July 12, 2017. The final decision for the purpose of the development is still being considered. Gaughan Companies is eager to develop in the city of St. Paul again. Just off of I-94, the property is within walking distance of the Minnesota United FC Stadium and the Snelling Avenue Metro Transit Green Line. In addition to a new Whole Foods, this ideal neighborhood is also conveniently located near several major universities, including Concordia University, Hamline University, Macalester College, University of St. Thomas and St. Catherine University. Over 42,000 vehicles pass by this corner every day. The current building was constructed in 1913, and the property has been owned

FirstService Residential, North America’s leading residential property management company and the largest in Minnesota, announced the expansion of its business in the Twin Cities with the acquisition of Paradise & Associates (“Paradise”) and its portfolio of 100 clients. Maggie Paradise, Bob Paradise, and Sandy Lattu, who founded Paradise & Associates in 1999, will continue to lead the same staff in day-to-day operations of their client communities. The acquisition augments FirstService Residential Minnesota’s market-leading portfolio to more than 45,000 homes in over 475 associations in the Greater Twin Cities Area. “Paradise’s personal approach to managing a mix of 7,000 urban and suburban condominiums similar to our own portfolio made them the perfect partner

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to continue our growth in the marketplace,” said FirstService Residential Minnesota president, Mark Gittleman. “Adding respected industry leaders, Maggie and Sandy, and their experienced team brings yet another level of local expertise into the fold and strengthens a shared mission to make a difference every day to enhance the quality and lifestyle of the residents in the communities we serve,” he added. “FirstService Residential’s culture of prioritizing the experiences of its clients and associates and building its business one relationship at a time aligned perfectly with how Paradise has operated for nearly twenty years,” said Maggie Paradise, one of the company principals. “We are delighted to join the FirstService Residential family knowing our clients will also now benefit from the best-in-class service, breadth of corporate and technological resources, and value-added programs that make it an industry leader.”

July 2017

Tapestry Collection by Hilton Dougherty Funding LLC has closed a $17.5 million loan for the Tapestry Collection by Hilton, located in Glen Allen, Virginia. The loan will be used to acquire and rehabilitate the property, currently known as Wyndham Virginia Crossings Hotel and Conference Center. The Property was originally constructed in 1982 as an office property, and was converted to a hotel in 2001. The Hotel contains four buildings known as Jefferson, Madison, Monroe, and the Carriage House. The three main buildings are connected by an underground walkway system. The Hotel contains 183 hotel rooms and 25,700 square feet of indoor meeting space for banquets and catered group events. The meeting space consists of 24 conference rooms and the 4,700-square foot Henrico Ballroom. The financing was arranged for OCI Virginia Crossings, LLC and Dougherty Funding serves as lead lender and servicer for the loan.

Dougherty Funding LLC closes $17.5 million loan for

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Page 8

Dougherty Mortgage LLC closes $7.3 million Fannie Mae loan for Pineview Apartments Dougherty Mortgage LLC, a full service national mortgage banking firm, recently closed a $7.3 million Fannie Mae loan for the acquisition of Pineview Apartments, a 152-unit market rate multifamily apartment property located in Garland, Texas. The Fannie Mae 12year term, 3-year interest only loan has a 30-year amortization schedule and was arranged through a partnership with Old Capital Lending and Dougherty’s Minneapolis and Vienna, Virginia offices for borrower Pineview Apartments 152, LLC.

Dougherty Mortgage LLC closes $14.8 million Fannie Mae loan for Park Hill Apartment Homes Dougherty Mortgage LLC, a full service national mortgage banking firm, recently closed a $14.8 million Fannie Mae loan for the acquisition of Park Hill Apartment Homes, a 168-unit market

Minnesota Real Estate Journal

rate multifamily apartment property located in San Marcos, Texas. The Fannie Mae 12-year term, 3-year interest only loan has a 30-year amortization schedule and was arranged through a partnership with Old Capital Lending and Dougherty’s Minneapolis and Vienna, Virginia offices for borrower Park Hill SM, LLC and Prudential Investment Properties LLC d/b/a Prudential I.P. LLC in Texas.

CSM Lodging Completes Aloft and Element Hotel Development in Redmond, WA Newest addition to CSM’s extensive lodging portfolio serves Microsoft campus and more CSM Corporation, a Minneapolisbased lodging, commercial real estate and development firm, today announced the completion and opening of the dualbranded Aloft and Element Hotel Development in Redmond, Washington. The 150-room Aloft Seattle Redmond and 131-room Element Seattle Redmond is located just outside the campus of Microsoft Corporation’s world headquarters. Both properties provide com-

fortable, stylish, sustainable and techforward accommodations to business and personal travelers alike. It is the first dual-branded Aloft/Element property for CSM. “CSM Corporation is proud to deliver hotels that are equally stylish and technically advanced for a tech-forward community like Redmond,” said CSM’s President of Lodging and Residential Steve Schlundt. “Guests from around the world will enjoy all the space and amenities that will allow them to be comfortable and in control whether they’re working or relaxing.” The two hotels are located inside one building and share 7,600 square feet of event space, seven meeting rooms, an all-natural saline pool and large fitness facility. They are less than a mile from the headquarters of both Microsoft and Nintendo of America and nearby the offices of Boeing, Expedia and Google.

Doran Sells off Remaining Student Housing Properties at U of M Doran Companies’ Kelly Doran announced today the sale of The Bridges

July 2017

and The Knoll, the two remaining student housing properties of the six his company originally built, owned and managed at the University of Minnesota. The value of the transaction was $93 million. The buyer, TH Real Estate, is one of the largest real estate investment managers in the world, managing a suite of nearly 80 funds and mandates spanning both debt and equity across diverse geographies, sectors, investment styles and vehicle types. The firm has focused on multi-family housing for over two decades, but more recently have targeted student housing at public universities with Division I athletics and enrollment levels of at least 15,000. Doran said the sale of The Bridges and The Knoll is a bittersweet moment as, at least temporarily, he ends a seven year development spree that began in 2010 with Sydney Hall—the trend-setting development in Dinkytown named for his daughter that kicked off the run of six premier student housing projects he built at the University. “From the very beginning we designed and built our projects to be a

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notch above and then staffed them with exceptional employees who were dedicated to serving and caring for our student residents with respect. It was a formula that worked and we are very proud of our success. We will surely miss having a presence at the University,” Doran said. Doran, who continues to own retail properties in the Dinkytown core business district, feels there is still a market for new housing at the University but has pivoted to building multi-family projects in Minneapolis and the Twin Cities suburbs and has no current plans for further student housing development.

MARCUS & MILLICHAP ARRANGES THE SALE OF A 26,020-SQUARE FOOT RETAIL PROPERTY 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 South

Minnesota Real Estate Journal

Pond Center, a 26,020-square foot retail property located in Champlin, Minnesota, according to Craig Patterson, regional manager of the firm’s Minneapolis office. The asset sold for $2,500,000. Sean Doyle, Matthew Hazelton, Adam "AJ" Prins and Cory Villaume, 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. The buyer, a limited liability company, was secured and represented by Claire J. Roberts and Marc C. Paylor, investment specialists in Marcus & Millichap’s Minneapolis office. South Pond Center is located at 11350 Aquila Drive North in Champlin, Minnesota. “The marketing of this center generated multiple offers, clearly showing that there is pent up demand for well-located class B and C centers. South Pond Center had vacancy and below market rents, leaving the new owner the opportunity to increase

occupancy and grow rents,” says Hazelton.

Bridgewater Bancshares, Inc. Closes Private Placement on $25 Million Subordinated Notes Bridgewater Bancshares, Inc. (the “Company”), parent company of Bridgewater Bank, announced today it has completed a $25 million private placement of subordinated notes due July, 2027. Bridgewater Bank, founded in 2005, has a solid history of proactively raising capital to support its successful, growth model. Bridgewater is among a handful of banks in the Midwest market to use this type of financial instrument to fund growth. The subordinated debt is structured as a 10-year unsecured fixed to floating note, with a fixed rate of 5.875% for the initial five years, payable semiannually. Unless redeemed earlier, the note will mature on July 15, 2027. From July 15, 2022 to maturity, the

July 2017

interest rate shall reset quarterly to the then current three-month LIBOR rate plus 388 basis points, payable quarterly. Prior to marketing the note, the Bank received an investment grade rating from Kroll Bond Rating Agency (KBRA), a Nationally Recognized Statistical Rating Organization registered with the SEC. “We are very pleased with the overwhelming response to this offering,” said Bridgewater Bank President and CEO, Jerry Baack. “It is truly a testament to the Bank’s unique platform. The new capital positions us well for continued strategic growth and the historic low interest rate environment makes the overall cost of capital quite attractive.” The Company intends to use the net proceeds for general corporate purposes and to provide capital to support the growth of Bridgewater Bank. Proceeds from the issuance of the subordinated debt will qualify as Tier 2 capital for regulatory purposes and the portion that the Company conNews to page 20

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Minnesota Real Estate Journal

July 2017

Enhancing workplace culture through connections with nature Steve Shepherd, Vice President | Colliers International | MinneapolisSt. Paul “Do you want to just go to the bar?” And so ends the “informal work session” started by two millennial creatives with a well-known ad firm when they attempted to have a meeting in the outdoor collaboration space at their downtown office building.

t turns out when the temperature hits 90 degrees with 80% humidity in Minneapolis, a downtown parking ramp with an artificial turf rug and the smell of car exhaust is still just the unwanted, unused top level of a parking ramp. For the building owner who invested in the space, it’s not working as the intended live-work-play third workplace for results-driven millennials who are focused on achieving a new balance of production and collaboration. You can’t recreate the smells, sounds and fresh air of nature when your view is obscured by cement slabs

and brick walls. Hopefully, it still checks a box on showings with tenantprospects. I’ve written in the past why I believe there’s still a place for well-positioned and well-managed suburban office space in the future, even as we work with the reality of urban migration and the densification of CBDs and adjacent creative districts. An effective use of surrounding outdoor environments can be a major reason why one suburban office building thrives while another flounders, losing tenants to downtown. Naturally Inclined Connecting a workplace to the outdoor environment is not a trend; it satisfies a base yearning that workers have felt since the first caveman exchanged a dozen clubs for a wooly mammoth pelt. As a proud UW Badger, I believe famed naturalist and fellow alum John Muir sums up the worker’s connection to nature and its relationship to providing for one’s family best. Smart suburban landlords are heeding this timeless wisdom. Employers are demanding more of their increasingly millennial-driven workforces than ever before. In May of this year,

The Washington Post reported that the average work week is now up to 47 hours per week, almost a full extra work day. Further investigation shows that a minimum wage worker has to work 87 hours per week to afford a one-bedroom apartment in Seattle (the Stranger) and an 80-hour work week in Miami (Miami New Times). With the increased workload, savvy corporate leadership offers flexibility in the work week in order to attract and retain talent. An easy escape during the workday to a comfortable outdoor environment on-campus, allowing employees time to recharge or collaborate in a relaxed setting while getting fresh air will aid a healthy and happy corporate culture. Striking that work/life balance while keeping employees on-site is a win for executive decision makers who will benefit from increased productivity. The Nature Advantage As an office leasing agent for Colliers International in Minneapolis-St. Paul, I’m responsible for marketing Crescent Ridge II, a 300,000 RSF Class A office property owned by Piedmont Office Realty Trust. In addition to

a core suburban market location on busy I-394, just a short 12-minute drive to the Minneapolis CBD, the building enjoys a competitive advantage with an immediately adjacent Minnetonka city-owned nature preserve. The wetlands area with surrounding run/walk/bike trails is easily missed by the thousands of commuters traveling down I-394 to downtown, but is a treasured amenity of the tenants who enjoy a quick outdoor workout during the noon hour or a water view from their office. Seth Redfield, property manager for Piedmont, summarizes the relationship with the preserve: “This past year we made a significant investment in our cafeteria and the upgrade was favorably received by tenants. As the weather turned sunny these past few weeks, it’s been remarkable how many tenants have gravitated toward the cafeteria’s outdoor patio overlooking the preserve. We’re in the process of examining how to better leverage our natural surroundings: whether it be with another augmented patio area off our lobby for informal gatherings and tenant socials or better connectivity to the nature trail Nature to page 18

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Minnesota Real Estate Journal

July 2017

Vikings From page 1

feet of high-end office and medical office space, approximately 950 units multifamily housing, a conference center/hotel, retail, entertainment and restaurants. The project will also include open and public spaces with trails, wetland preserves and other amenitiesâ&#x20AC;&#x201D;and it will all be anchored by the Vikingsâ&#x20AC;&#x2122; new 40-acre team headquarters and practice facility called the Twin Cities Orthopedics Performance Center. The new facilities are on track to open in March 2018, in which time the Vikings will relocate from their current home at Winter Park in Eden Prairie where theyâ&#x20AC;&#x2122;ve been since 1981. The indoor practice facility will be 92,000 square feet and 100-feet high to accommodate kickers and punters. The complex will also feature cardiovascular and specialized speed rooms, a hydrotherapy room and post-workout recovery rooms, a team auditorium and player position meeting rooms. In addition, the new campus will include four outdoor practice facilities; a 6,000-seat outdoor stadium dubbed TCO Stadium, which will also host local high school football teams and other community events; and a

184,000-square-foot headquarters for administrative and staff offices, which will allow the team to consolidate operations under one roof. Combined, 3,700 tons of steel are being used for the headquarters and practice facility structures, says Mark Miller, senior project manager at Minneapolis-based

Kraus-Anderson Construction Co., the general contractor for the project. Moving training camp to Eagan starting in 2018 The Vikings announced that after holding their training camp at the Minnesota State University Mankato cam-

pus for the past 52 years, the 2017 camp will be its last in Mankato. The 2018 camp will be at the team's new Twin Cities Orthopedics Performance Center. In other development at the site, Vikings to page 16

4 Hours Real Estate CE Applied For 8:00 AM Bloomington Game Changing Projects • City of Bloomington Changes & Updates • Mall of America Phase 2 • Redevelopment of the Old Thunderbird Hotel site • Public Infrastructure Update along 494 & The impact of the light rail to the area • Other Notable Projects impacting the region • Bloomington Central Station Development • Bloomington South Loop Development - Housing, Hotels, Office and Retail

8:50 AM Minneapolis/St. Paul International Airport Development & Expansion • Terminal 1 & Terminal 2 Expansion Plans • Airport Parking – Expansion Plans • InterContinental Hotel Development at the Airport • Airport Commercial Real Estate Opportunities • Vacant land available surrounding the airport and what is the best use • What types of Re-Development and Re-Positioning Opportunities are available • Process for Securing On-Airport Real Estate • Opportunities for Architect, Designers, Prime Contractors and Subcontractors • Future forecast and trends that will positively impact the Airport and Airport region for generations

9:30 AM Edina (France Avenue) & Eden Prairie – Reshaping Edina & Eden Prairie for the future • Impact of the renovation of Southdale Center on the area • Infrastructure updates and changes that are attracting development and investment • Multifamily Projects that have impacted the area: Avenue on France, 50th and France, Cake Residence • Pentagon Park redevelopment • Eden Prairie Mall and the impact of Scheels to the market

10:30 AM Southeast Development Update • Vikings Practice facility and what it means to City of Eagan • Development Plan surrounding the Vikings Practice Facility • Central Park Commons in Eagan • Prime Therapeutics 500,000 Eagan Corporate Headquarters • Other Redevelopment Opportunities in the Area

11:25 AM South of the River Development Update • Burnsville: Hobby Lobby, Aldi, Showcraft, Soccer Blast, Nicollet Plaza • Lakeville: Airlake Development, Hy-Vee, Interstate South Logistics Park • Apple Valley: Main Street, Orchard Place

Speakers Include Gene Winstead, Mayor of Bloomington Eric Johnson, Metropolitan Airport Commission Jim Graves, Graves Hospitality Mark Fabel, McGough Peter Deanovic, Buhl Investors Scott Tankenhoff, Hillcrest Development Shawn Smith, Wildamere Bruce Nordquist, City of Apple Valley John Johannson, Welsh Companies/Colliers International David Olson, City of Lakeville Gordy Stoffer, United Properties Shane Rudlang, Bloomington Port Authority James Hovland, Mayor of Edina John McCarthy, Newmark Knight Frank Skip Nienhaus, City of Burnsville Carl Runck, Ryan Companies John Penhollow, Minnesota Vikings Kurt Krumenauer, Midwest Apartment Brokers Jeff Plauche, Arrow Retail

For More Information and Registration

www.mrej.com/southsub To become involved in upcoming events, Please contact:

Jeff Johnson

Jay Kodytek

952.405.7780 jeff.johnson@resummits.com

952.405.7781 jay.kodytek@resummits.com

Page 16

Minnesota Real Estate Journal

Vikings from page 14

Twin Cities Orthopedics is currently building a 78,000-square-foot medical office building and a 55,000-squarefoot, mixed-use building to house its Sports Medicine Center and the Vikings team store. These buildings are also scheduled for completion next March and are being constructed by Kraus-Anderson. Phased development for the remaining 160 acres The remaining development will unfold in phases, which could occur over 10 or 15 years. “We’ve begun to turn the corner on design and construction of the practice facility and team headquarters and are really moving forward now full steam on the broader 200 acres of mixed-use development,” says Lester Bagley, executive vice president of public affairs for the Vikings. “As beautiful and incredible as U.S. Bank stadium is, we think our new facility in Eagan is going to be just as well-received and important to the Vikings and the community as the stadium.” Bagley says the vision for the Eagan practice/headquarters campus is for it to be very community-focused with youth sports and community programming. “And the broader development –

the live/work/play Vikings destination -- is really special,” he says, adding that there’s a unique opportunity to create a Vikings destination that’s fan-friendly and family-friendly. Vikings to next page

July 2017

“There will be a Hall of Fame and Vikings’ tradition and history will be celebrated there,” he says. “We’re also working on adding a sports technology incubator or tech accelerator. We’re looking at a potential STEM program with an education component and a hotel concept that we’re studying hard right now.” Bagley says Viking Lakes has been very well-received and there’s strong interest on the real estate and corporate development side. “The Vikings are the anchor tenant of the broader destination,” he says. “We’re in early stages and it will be phased in. Some of it will be marketdriven, of course, in terms of what happens and when. The timing will need to respond to the market, but so far, the market and the interest have been strong, so here we go.” Plans call for it to become a major destination The vision is for Viking Lakes is to attract regional, national and international corporate users, tenants, residents and business partners. “What’s so unique about this site is for how large it is, how it was available,” McCarthy says. “It’s dead center between Minneapolis and St. Paul, close to the Mall of America, close to the Minneapolis-St. Paul International Airport, and it offers a lot of amenities. It’s such a beautiful site.” With an anchor like the Vikings and its strong brand, McCarthy believes the development will garner global attraction. He says the site will appeal to corporations and serve as a magnet for headquarter relocations. “This is going to be a development that changes the landscape of the southern [Twin Cities] suburban office market,” he says. “And because the Vikings are going to be out there, they’re going to set this apart beyond any other opportunity for corporations. They want to get it right. They’re fortunate because they’re a strong brand and strong financially, yet they’re looking at attracting companies to be partners and share resources out there and best practices. They want companies to grow with them and consider leveraging the Vikings’ brand. The companies that are going to appreciate it are the ones that want their tenants to truly have a live/work/play environment... The Vikings want this to be a sustainable, healthy, physical, exciting kind of environment, so some of our marching orders are to find appropriate tenants that line up with that.” Kraus-Anderson’s Miller says he and McCarthy meet often to discuss the development. “We want to help him do his marketing piece of the rest of the land,” Miller says. “We can help him by having access and showing him viewpoints and keeping him up to date with what’s going on with the buildings, so he can relay that to future customers. Let peo-

Minnesota Real Estate Journal

ple know, ‘Hey, it’s going to open in March, so if you want to be in the game, you need to get moving now.’” Big boon for city of Eagan; bringing major development to underutilized site “Viking Lakes brings vitality and vibrancy to a quiet corner of the city, and we expect the redevelopment to attract additional investment in northeast Eagan,” says Jill Hutmacher, director of community development for the city of Eagan. “Already, the city is very pleased to see construction beginning for the new 409,000-squarefoot Prime Therapeutics headquarters,

just southeast of Viking Lakes.” Currently, Hutmacher says the Vikings are focused on completing the headquarters, practice facilities, and Twin Cities Orthopedics buildings. The Vikings recently submitted plans for the plaza area south of the stadium, which will provide public gathering space with a “higher level of design and amenities than probably anything that we have seen previously in Eagan,” she says. “The Vikings are setting a new bar for the quality of publicprivate open spaces. We’re looking forward to seeing plans for subsequent phases.”

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Hutmacher adds that only 32 cities can boast to being home of an NFL franchise. “The Vikings have a strong fan base not just in Minnesota, but throughout the Upper Midwest and the nation,” she says. “Viking Lakes is being planned and designed to host a variety of events including Friday Night Lights, soccer or lacrosse tournaments, concerts, and of course, team events as well. Many of these events will have a regional or national draw and Eagan looks forward to welcoming out-oftowners.”

Page 18 Nature from page 12

for the runners and bikers.” Nature’s Effect In support of a nature-nurture philosophy, the University of Minnesota, Taking Charge of your Health and Wellbeing online newsletter states, “Nature reduces our anger, fear, and depression and increases our positive mood and psychological wellbeing. This not only increases our happiness, it makes us feel better physically. Time in nature also brings us out of ourselves and our narrow concerns and connects us to a larger world where we find beauty and interest. Thus the environment is connected not only to our physical, emotional, and spiritual health, but to purpose and community.” In addition to providing a needed escape “where nature may heal and give strength to body and soul” during a busy work week, an outdoor space can provide the necessary hip and progressive factor to differentiate a suburban building from its competition. Faced with significant vacancy in a stagnant submarket, owner Felton Properties updated an underutilized courtyard space at Braemar Office Park in suburban Edina, MN. The renovation added a new outdoor patio, fire pit, lawn games area and put-

Minnesota Real Estate Journal

ting green. Following the renovation, came 40,000 SF of new leases in 2016, in a southwest suburban market showing over 200,000 SF of negative absorption for the year according to Colliers research. Braemar’s courtyard proves in

the desk at 4:00, grab a shot of espresso at the café, putt around the green or play a game of corn hole. An executive may never use that putting green but if they can tell a recruit that ‘we have a putting green at our office,’ that can be a differ-

“ The making of far-famed New York Central Park was opposed by even good men, with misguided pluck, perseverance, and ingenuity, but straight right won its way, and now that park is appreciated. So we confidently believe it will be with our great national parks and forest reservations.” part that an outdoor space done well can be an impetus for new leasing and a differentiator for companies seeking space to attract talent. Jeff Borlaug, Managing Director at Felton Properties says of the updated courtyard: “We really wanted to activate that outdoor area by bringing in people to collaborate or relax in the space. As an owner, we know you have to create that live-work-play experience in the suburbs so that tenants and their employees want to be there. It’s all about the tenant experience and providing that opportunity to jump away from

entiating amenity that stands out with a potential employee.” Connecting to outdoor space in a manner that will provide a meaningful amenity for suburban office tenants does not come without a cost to building ownership. That said, when done well, it can provide the differentiating factor needed to attract tenants and a return on investment equal to, or better than, interior renovations. Prioritizing Connectivity The prioritization of resources allocated to outdoor space as part of com-

July 2017

mercial development is as age-old an issue as a worker’s desire for connectivity to nature. For inspiration, we can turn back to our friend John Muir and the battle to devote prime real estate to outdoor space in the most urban of work locations. Even the most conservative of New York commercial developers would be challenged to minimize the positive impact on real estate, the city’s economy and the New York worker’s sustained well-being that the establishment of those 778 acres of park space - in lieu of development - has produced over the past 160 years. With the demand for increased productivity and performance resulting in a longer work week, the habitat of the modern worker can easily be defined as the built environment. Spending upwards of 90 percent of our time within the confined walls of office buildings, we have no outlet for our innate need for connections to nature, essential to our health and wellbeing. Today’s suburban office owners would be well-served in the fight against urban migration to heed the words of Mr. Muir and strategically devote resources to improving their property’s connectivity to nature.

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Bankers From page 1

Don’t work bank hours In a mutually beneficial business relationship, a partner should never hinder each other’s growth. Business owners are expected to answer over 100 plus emails a day, manage their teams and somehow stay on top of their strategic plan. An educated business banker can be a valued partner. Let’s take a typical commercial real estate investor. He or she is looking for the next multi-family or commercial shopping center deal. While the investor is negotiating, establishing financing, and making sure their kids get to soccer practice on time, the business banker is there to quarterback the transaction. From establishing the appropriate deposit accounts with the correct individuals, to making sure the investor has state-of-the-art ACH rent collection capabilities, the banker works all hours behind the scenes to ensure the investor isn’t limited by banker hours. Death of the “Gold Sapphire Ultra Platinum Checking Account” Simplicity and accuracy are making its way back into banking. Unfortunately, with hundreds of banks both big and small in the State of Minnesota, some

Minnesota Real Estate Journal

institutions offer an extensive amount of business checking, savings, and money market accounts. These institutions are marketing their deposit products with catchy names, cash-back incentives, or “free” banking. However, the futuristic bank does not succumb to this transactional mentality. By focusing on custom products, employing technology effectively and tailoring services specific to the entrepreneur or real estate professional, there is no need for tricky marketing tactics. The value is in the overall experience and the technology is certainly there to ease any future banking headaches. There’s value in simplicity. Dixon Diebold, owner of Reurban Real Estate, says that a solid relationship with his banker is a top priority. “Managing bank accounts is a very large part of any real estate business day to day operation. Having a banker that you enjoy working with makes those interactions more enjoyable, productive and hassle-free.” Real FaceTime Building a virtual network via LinkedIn is not enough. A well-networked business banker has a solid understanding of the local business environment and knows market leaders and industry experts. Using your business banker as a resource for referrals is not only recommended, it should be an

July 2017

expectation. An effective banker will help build your personal network with introductions to other industry contacts. The best partnerships result from establishing synergistic relationships.

your check. “Banking shouldn’t be a pain point for your business but more like an opportunity,” Diebold said. “Once you find the right relationship that in and of itself is a game changer.”

In Sync Even with the inevitable changes afoot, technology and a strong banking relationship can coexist. While your business banker might not provide the best guidance on posting the most Instagramable photo, their partnership provides value beyond taking a picture of

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July 2017

Minnesota Real Estate Journal News from page 10

tributes to Bridgewater Bank qualifies as Tier 1 capital for the Bank. Sanders O’Neill + Partners, L.P acted as sole placement agent and Barack, Ferrazzano, Kirschbaum & Nagelberg L.L.P. provided legal counsel

Colliers International | Minneapolis-St. Paul negotiates sale of the Abbott Campus in Minnetonka The Investment Sales team at Colliers International | Minneapolis-St. Paul represented Eagle Ridge Partners/CarVal in the sale of the 280,289 SF Abbott Campus in Minnetonka. This is the first investment in the Twin Cities for Chicago-based Syndicated Equities. “This was an opportune time to bring the property to market. The strong investment climate in the Twin Cities resulted in an interest level that was incredibly high and from across the globe,” said Colin Ryan, Vice Pres-

ident at Colliers International | Minneapolis-St. Paul. “The Investment Sales team at Colliers was thrilled to help bring Syndicated Equities to the Twin Cities industrial market.” The buildings, occupied by Abbott Laboratories who acquired St. Jude Medical in January of this year, recently extended their lease. The facilities were occupied for over 20 years and were developed in the 1980s with an established strong infrastructure that includes clean rooms for laboratory space and research and development. The Colliers International | Minneapolis-St. Paul Investment team of Vice President Colin Ryan, Vice President Dave Berglund and Senior Vice President Mark Kolsrud represented Eagle Ridge Partners/CarVal in the transaction.

United Properties to develop new Chanhassen mixed-use apartment project anchored by ALDI grocery store United Properties' plans for Venue, a

new mixed-use apartment development anchored by the grocery store ALDI, has received site plan approval from the City of Chanhassen to move forward. The Venue project was approved at last night's city council meeting following a review and recommendation by the City's planning commission and a public hearing last month. Located at 525 West 78th St. near the Chanhassen Dinner Theatre, Chanhassen Cinema and the SW Transit Park & Ride, Venue will feature a 19,000-sq.ft. ALDI store as its sole retail tenant. Additionally, the development will include six stories of 134 market-rate apartments over the store, as well as a covered parking garage. Construction is expected to begin early in 2018 and be completed by early 2019. Venue is a joint venture of United Properties and Roers Investments. The Joint Venture purchased the property, which currently houses an aging multitenant retail building, in 2017. “We're pleased to receive the City's

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approval on our plans for Venue. It allows us to bring a fresh housing option to the City along with a best quality and value priced grocery store, both of which we believe there is significant demand for in the market,” said Rick McKelvey, vice president of development for United Properties. “We welcome this opportunity to work with the City of Chanhassen to continue strengthening its already healthy community.” “We are excited to bring this highquality development to downtown Chanhassen, and are appreciative to the members of the community for their assistance and foresight in bringing this project together,” said Brian Roers, coowner of Roers Investments. “Venue will be another great investment into an already vibrant community and we are excited to be a part of it.” In addition to United Properties, Roers Investments and ALDI, the project team includes architecture firm LHB, Stevens Construction and Jonathan Adam of Silverstone Realty. News to page 22

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Minnesota Real Estate Journal People to page 4

Mercy Hospital, in addition to a multitude of other healthcare projects around the region. Alena secured her Bachelors and Master’s degree in Architecture from the University of Minnesota where she is also a member of the adjunct faculty. “Alena brings the unique ability to communicate at all levels of a project from business development to planning, drawing and documentation. Her experience will allow our customers to feel closely connected to all aspects of a project,” said Mike Rodriguez, Vice President A+E, Ryan Companies. Adam McLane, AIA, NCARB, joins Ryan as Senior Architect, Healthcare, with deep experience and notable success in the design and development of complex healthcare facilities. Adam brings a perfect blend of architecture expertise and passion for working with clients to ensure healthcare specialty information is covered with respect to code compliance, fire protection proto-

cols, infection control and more. “Adam’s attention to detail is a key component in his project success; he brings a valuable perspective paired with a vision and passion for architecture and construction to our team,” said Rodriguez. Adam was a double major at North Dakota State University earning his degrees in Architecture with an emphasis on Construction Management, and Environmental Design. “These hires expand our healthcare footprint around the nation. Healthcare is an important sector for us and recruiting top talent like Alena and Adam give us the strategic expertise we desire to deliver quality projects and outstanding customer service. Through these two great additions, we expect to build on our mission of taking our customer’s vision and shaping it into structures that help their business and people thrive.” said Mike Ryan, Market Leader North Region.

July 2017

News to page 21

Frauenshuh Commercial Real Estate Group and BTO Development Merge Two of the most trusted names in commercial real estate combine to offer clients the most comprehensive platform in Minnesota Frauenshuh Commercial Real Estate Group (Frauenshuh) today announced that BTO Development, LLC (BTO) will be incorporated into the organization, operating under the Frauenshuh umbrella. The addition will add to the growth of Frauenshuh’s property management portfolio and supplement its property development across all market sectors, positioning the merged entity as one of the most comprehensive commercial real estate firms in Minnesota. As part of the transition, BTO president and owner, Allen Hill, will join Frauenshuh as the senior vice president of development services. Joining Mr. Hill in the BTO transition to Frauenshuh will be Jeffrey Jonswold, BTO director of property management, Jeffrey Simonsen, building maintenance engineer, and Marie Greenwood, receptionist/administrative assistant. “This transaction is a tremendous opportunity for us to expand our breadth of real estate services both on a local and national level within the commercial real estate industry,” said Dean Williamson, president of Frauenshuh. “Bringing BTO into the Frauenshuh family will help us maintain an unparalleled level of industry expertise and it reaffirms our commitment to provide the best possible service and solutions to our clients.” Joining forces will allow both companies to stay on the leading edge of service for their clients by combining their strengths while maintaining focus on the needs of their clients. Both companies share a common passion for an unparalleled standard of professionalism and the highest level of customer service. “Merging with a strong, well-capitalized full-service commercial real estate firm such as Frauenshuh will significantly enhance the depth of resources available to BTO clients, tenants and business partners,” said Allen Hill, Frauenshuh senior vice

president of development services. “We pledge our continued commitment to provide industry leading solutions and services.” BTO Development Corporation was founded 37 years ago by partners Kenneth Benson, William Thomas and Thomas O’Connell. The firm’s operations and ownership were assumed by Allen Hill in April of 2014. At that time BTO was restructured as BTO Development, LLC.

Red Rock Senior Living to Become New Perspective – Woodbury New Perspective Senior Living, a senior living company based in Minneapolis, announced today that Red Rock Senior Living in Woodbury, Minn., will become New Perspective – Woodbury. The company also announced that it would be assuming day-to-day operations of the senior community effective immediately. “This is our first community on the east side of St. Paul,” said Ryan Novaczyk, New Perspective Senior Living President and CFO. “We are very focused on putting residents first, and we are excited about bringing our program and services to this market.” A key aspect of that New Perspective Senior Living’s programming is its Four Pillars approach to senior living. The pillars seek to enhance its residents’ quality of life through physical fitness, brain fitness, social and spiritual enrichment, as well as excellent nutrition and dining. “We believe our residents deserve to live life on purpose and age successfully,” stated Chris Hyatt, New Perspective Senior Living Partner and Chief Operating Officer. “This acquisition is one more positive step toward our goal of 10,000 seniors living life on purpose by 2025.” New Perspective – Woodbury includes 77 total units, 39 independent and assisted living units, and 32 memory care, and six care suites. With the addition of the Woodbury location, New Perspective Senior Living will now operate 13 senior communities in Minnesota, including seven in the greater Minneapolis-St Paul 11-county metro area, with ten additional communities in North Dakota, Wisconsin and Illinois.

July 2017

Minnesota Real Estate Journal

News from previous page

Former Smiths Medical Headquarters sold to investor -- Forum Equities has plans to reposition the office building -Smiths Medical has sold their former Arden Hills, MN headquarters to developer Forum Equity Partners. Forum Equity Partners, who closed on the 165,000-square-foot office-tech space last week, has plans to renovate and reposition the building back into a multi-tenant office flex building. Smiths Medical, a unit of London’s Smiths Group PLC, manufactures and sells medical devices that include druginfusion pumps and consumables to hospitals and surgical centers. The company had outgrown the Arden Hills location and in December of 2014 announced plans to relocate to a new build-to-suit corporate headquarters in Plymouth, MN. Since Smiths Medical’s departure, the Arden Hills building has been incredibly well-maintained, an attractive selling feature for

Forum Equity Partners, along with its convenient location and number of amenities in the surrounding area. “Our team started looking for a variety of potential tenant types, and by proving the market, we were able to secure a solid investor for Smiths Medical,” says Michael Gelfman, Vice President at Colliers International | Minneapolis-St. Paul. “This is a great investment opportunity for Forum Equity Partners. Their strong reputation as a developer who repositions properties, will breathe life back into a space that has a fair amount of optionality.”

Forum Equity Partners is a private equity partnership led by Steve Hoyt of Hoyt Properties. The Investment Sales team from Colliers International | Minneapolis-St. Paul, along with Michael Gelfman, Vice President in the office brokerage division at Colliers International | Minneapolis-St. Paul represented Smiths Medical in the disposition of the for-

mer headquarters.

Cushman & Wakefield NorthMarq Announces First Set of Leases at 4Front, Former Imation Campus in Oakdale Cushman & Wakefield NorthMarq has arranged two leases totaling 23,100 square feet (sf) at 4Front, a 550,000 sf Class A office and high-tech business incubator at Interstate 694 and County Road 14 in Oakdale, Minn. The following tenants have signed leases to occupy space at the campus and construction is underway: Gemalto, a world leader in digital security, has signed on to occupy 15,000 sf. The office will be the first Twin Cities location for Gemalto, which creates and sells security software for large businesses and government organizations. Impact Group, an employee coaching and career transition consulting firm, has signed a lease to occupy 8,100 sf. The office at 4Front will be a consolidation of two previous locations

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in the Twin Cities for Impact Group. “We’re very pleased to welcome Gemalto and Impact Group to 4Front, an emerging top office property in the eastern Twin Cities,” said Eric King, senior director for Cushman & Wakefield NorthMarq and leasing broker for the property. “These companies fit the spirit of our project, and we’re excited that interest in 4Front remains significant.” 4Front offers Class A office space in four interconnected buildings, and is also home to Incubology, a world-class high tech business incubator which occupies approximately 20,000 sf, including labs, clean rooms, offices and other spaces. Slumberland Furniture, a familyowned furniture retailer, announced in 2016 that it would purchase the campus after its previous owner, Imation, put the property up for sale. King and Brian Brisky of Brisky Commercial represented owner Slumberland in lease negotiations for the first tenants at 4Front, which Imation formerly used as its corporate headquarters.