Mrej March April 2018

VOLUME 34, NUMBER 4

©2018 Real Estate Publishing Corporation

March April 2018

Destination Medical Center Fuels Construction Boom

By Liz Wolf

A

fter years of planning, a massive $5.6 billion Destination Medical Center (DMC) is now driving a building boom that will forever change downtown Rochester’s skyline.

The DMC initiative is the biggest public-private partnership in Minnesota’s history. It’s expected to generate more than $5 billion in private investment, add 30,000 new jobs and thousands of new residents,

and transform the downtown over the next 20 years – all while ensuring that Rochester remains a global medical destination. The project is one of the largest economic development initiatives in the country.

In 2013, the Minnesota Legislature approved $585 million in incentives for the DMC, which will help Mayo Clinic continue to expand and remain competitive with other world-class medical centers.

According to city documents, the city has approved $2.62 billion worth of construction permits since 2013. The permits are for a mix of housing,

hotel, retail, office and research space.

“The state took a leap of faith, and now five years later, there’s a tremendous amount of evidence that they took a risk with this community and it’s really paying off,” says Patrick Seeb, director of economic development and placemaking for the Destination Medical Center’s Economic Development Agency.

“When this initiative got launched, it really took on a life of its own in terms of making the marketplace aware of the growth opportunities that

Homegrown Bridgewater Bank goes public

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Marking the first Minnesota-based financial institution IPO in 25 years The Minnesota Real Estate Journal recently sat down with Jerry Baack, CEO of Bridgewater Bank to discuss how Bloomington-based Bridgewater Bancshares Inc recently went public and learn more about Bridgewater Bank’s plans for growth MREJ: Tell us more about IPO & Bridgewater Bank?

Jerry Baack: Trading under the symbol “BWB,” Bridgewater Bancshares Inc. shares began trading on the Nasdaq market on March 14. To mark the occasion, I was Bridgewater to page 8

DMC to page 16

Special Section Page 24

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March April 2018

Minnesota Real Estate Journal

Featured Stories

MARCH APRIL 2018 • VOLUME 34, NUMBER 4

Page 3

Departments PEOPLE ON THE MOVE 4 BREAKING GROUND 23 CLOSINGS, LEASES AND OTHER NEWS

1

33

DEVELOPMENT BOOM CONTINUES AROUND MAYO CLINIC’S DESTINATION MEDICAL CENTER HOMEGROWN BRIDGEWATER BANK GOES PUBLIC

5

BLOOMINGTON’S SOUTH LOOP DISTRICT IS RIPE FOR MORE DEVELOPMENT

6

WOMEN MAKING STRIDES IN THEIR INDUSTRY

7

HOW WOMEN ARE STANDING OUT TODAY IN COMMERCIAL REAL ESTATE

19

REMEMBERING THE UNSINKABLE JON HEMPEL

Minnesota Real Estate Journal (ISSN 08932255) Copyright © 2018 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 209, Maple Grove, MN 55369. Monthly Business and Editorial Offices: 13700 83rd Way North, Suite 209, Maple Grove, MN 55369 Accounting and Circulation Offices: Jeff Johnson, 13700 83rd Way North, Suite 209, 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 209, Maple Grove, MN 55369

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COSTCO WHOLESALE SELECTS ST. CLOUD LOCATION

©2018 Real Estate Publishing Corporation. No part of this publication may be reproduced without the written permission of the publisher.

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BUILDING AN ONLINE REPUTATIONS MANAGEMENT PROGRAM

24

2018 MREJ AWARDS

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Minnesota Real Estate Journal

13700 83rd Way N, STE 209 Maple Grove, MN 55369 For information call 952-885-0815

President | Publisher Jeff Johnson jeff.johnson@resummits.com Vice President | Publisher Jay Kodytek jay.kodytek@resummits.com Chief Financial Officer Todd Phillips todd.phillips@resummits.com Consulting Editor Dr. Tom Musil tamusil@stthomas.edu Conference Manager | Art Director | Graphic Designer | CE Specialist Alan Davis alan.davis@resummits.com

EDITORIAL ADVISORY BOARD JOHN ALLEN Industrial Equities JEFF EATON 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

Tom Hoffman, former Principle at Avis and Young, Joins Colliers International | Minneapolis-St. Paul as Senior Vice President Hoffman brings nearly 20 years of real estate experience to the Colliers MSP brokerage team, specializing in occupier solutions Colliers International | MinneapolisSt. Paul is pleased to announce the recent addition of Tom Hoffman to the brokerage services team. Hoffman will work with the Colliers MSP brokerage teams to identify optimal tenant focused, occupier solutions for a wide range of Colliers MSP clients and prospects.

Hoffman, a former principle at Avison Young, brings nearly 20 years of real estate experience to Colliers MSP. Serving both on the commercial and residential side of brokerage, he began his real estate career with Coldwell Banker, specializing in multi-family and residential investment property redevelopment and sales. In 2010 Hoffman founded his own company, Victory Tenant Partners, a boutique Tenant Representation firm, that represented a broad and diverse range of clients.

“I’m excited to be joining Colliers MSP because of it’s local and international presence. This presence and the enhanced resources it affords me, will help me provide optimized solutions for my clients” states Hoffman.

“We are thrilled to have Tom join us at Colliers MSP. His leadership, market knowledge and energy will add great value to our entire team” says Bill Wardwell, Managing Director of Brokerage Services and Executive Vice President with Colliers International | Minneapolis-St. Paul.

WHITNEY PEYTON MIKE SALMEN Transwestern

13700 83rd Way N, STE 209 Maple Grove, MN 55369 For information call 952-885-0815

Ryan Companies Announces Promotion of Tony Barranco to Senior Vice President of Real Estate Development Ryan Companies US, Inc. North Region announced today the promotion of Tony Barranco to Senior Vice President of Real Estate Development. Barranco has been a central leader in a number of high-profile projects in the region such as Downtown East, Vintage

on Selby, and recently leading the Sons of Norway project in Uptown, Minneapolis.

In his tenure at Ryan Companies, Barranco has led or contributed to office, retail, hospitality, and multifamily development projects totaling over four million square feet with capitalized value of over $1B. Barranco has set himself apart in his work to coordinate complicated projects with users, neighbors, cities and key stakeholders to create positive outcomes and deliver comprehensive development solutions.

In his expanded role, Barranco will lead a multi-disciplined team of developers focused on the execution of mixed-use and corporate office projects in the North region. “Tony is highly accomplished and passionate about what we do for our customers and for the community,” said Mike Ryan North Region Market Leader. “He has established himself as a developer who can get challenging projects done with excellence.”

Ryan Companies Announces Promotion of Molly Ryan Carson to Senior Vice President of Real Estate Development, Market Leader Ryan Companies US, Inc. Southwest Region announced today the promotion of Molly Ryan Carson to Senior Vice President of Real Estate Development, Market Leader. Ryan Carson has been a central leader in a number of highprofile projects in the region such as GoDaddy, McKesson, AMKOR Technology and Farmers Insurance.

In her new role, Ryan Carson will lead business development and real estate development for Ryan’s Southwest region. “Molly is well known for her strong relationships and active involvement in the local real estate community,” said Rick Collins Regional President Ryan Companies “She is a consistent model of and reinforces Ryan’s culture of excellence and commitment to our customers.”

Ryan Carson will continue to serve as National Executive Committee board member for NAIOP, Vice Chairperson of NAIOP Arizona, development advisory board member for the City of Phoenix and board member for Valley

March April 2018

Partnership Preparatory.

and

Xavier

College

BKV Group Promotes Key Team Members National design firm names new partners, leaders BKV Group has promoted two team members to Partner and 33 to firmwide leadership positions. The promotions recognize each individual’s accomplishments and contributions to the firm.

BKV Group partners are professional team members who lead marketing segments or key areas of business. BKV Group’s new partners are: • Mark Harris, AIA, Senior Project Manager, Chicago Mark is a leader in BKV Group’s housing practice, with 25 years of experience focused on affordable and senior housing, higher education, and corporate architecture. His client-based approach yields successful project results and enduring client relationships.

• Chad Kurdi, PE, Senior Electrical Engineer, Minneapolis Chad leads BKV Group’s Electrical Engineering department, designing electrical systems for projects in each of BKV Group’s market sectors. In his 25 years of experience, Chad has worked as an electrical engineer, electrical trainer, and master electrician. The diversity of his experience provides Chad with in-depth and practical knowledge that benefits each of his projects.

Additional promotions on the leadership path include Associate Partners, Senior Associates, and Associates.

These promotions include: Associate Partners • Lauren Young, Business Development, Washington, DC • Craig Carter, AIA, LEED AP BD+C, Project Manager, Chicago • DuWayne Jones, AIA, LEED AP, GGP, Project Manager, Minneapolis • Charlie Charlton, Senior Construction Administrator, Minneapolis • Liza Kapisak, CID, LEED AP, IIDA, Senior Interior Designer, Minneapolis

March April 2018

Minnesota Real Estate Journal

Page 5

Bloomington’s South Loop District is Ripe for More Development

By Liz Wolf

T

he city of Bloomington has big plans for the South Loop, an area bounded by Interstate 494, Cedar Avenue and the Minnesota River. It includes the Mall of America, the nearby Ikea store, and a bunch of office buildings and hotels. City officials say the South Loop has the greatest development potential in the city.

The South Loop District also includes the Spruce Shadows Farm (also known as the Kelley Farm), which is the city’s last working farm and the biggest open, undeveloped site left in Bloomington. It’s 59 acres just southeast of Mall of America. The city has been eyeing the land for years.

Last fall, the city agreed to pay approximately $32 million to buy the farm and proposed it as a site for the 2023 World’s Fair. However, the bid lost out to Buenos Aires. The purchase agreement was contingent upon Minnesota being chosen to host Expo 2023.

The Bloomington City Council and Port Authority opted to cancel that purchase agreement.

“We do not have a current purchase agreement for the farm, and we’re not

pursuing one right now,” says Bloomington Port Authority Administrator Schane Rudlang.

In addition to the farm, the South Loop includes old buildings and parking lots that could be redeveloped into future hotels, housing, new office space as well as the Mall of America

expansion.

According to the city, over the next 40 years, two-thirds of Bloomington's growth potential “will be realized in the South Loop.” The vision is to transform the district from “suburban to urban.” The city wants to create a vibrant, walkable urban center with

businesses and housing, and the addition of the Blue Line light rail was part of that effort.

What’s currently happening in the South Loop? New hotels and restaurants have opened or are underway. An enormous water park is proposed near South Loop to page 22

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Minnesota Real Estate Journal

Women Making Strides in their Industry Mentorship and determination paved the way to success

By Andrea Pendergast Communications specialist Great River Energy

W

omen are playing an increasingly large and important role in the worlds of commercial real estate and economic development – and they are bringing with them a wealth of knowledge from previous jobs on their career path, as well as the strength of relationships built among each other along the way.

Erin Sparks, economic developer with Great River Energy – a not-for-profit wholesale power cooperative based out of Maple Grove, Minn. – and Kylle Jordan, regional business development manager at Minnesota’s Department of Employment and Economic Development (DEED), are examples of women making strides in their fields while working collaboratively to achieve both of their organization’s missions.

At DEED, Jordan works with businesses looking to expand or grow, hire workforce or purchase equipment and ensuring that it is a successful endeavor whether that means finding the perfect location or financial incentives to make it happen.

“We have specialized programs, such as tax incentives for data centers and a shovel-ready program, that parallel really well with utilities,” Jordan said.

Sparks notes that her role at Great River Energy is much of the same, though with a focus on a business’ power-related questions and needs, and the added layer of working with the utility’s 28 member-owner cooperatives located across the state.

Jordan outlined the three overlapping purposes between DEED and Great River Energy: working with businesses to help them expand; business attraction work for targeted industry sectors such as data centers, food processing and advanced manufacturing; and also certifying and promoting shovel-ready sites.

“We work closely in all of those areas with the unified message that Minnesota is a great place to expand your businesses,” Jordan said.

Another similarity between the two women: Neither anticipated going into this industry until they were encouraged to do so while attending St. Cloud State University. Sparks spoke of the dean of the community studies program as someone who told her, “You have a natural knack for this and I think you could be really successful in this career.” Jordan took the advice of a counselor to

Erin Sparks

Kylle Jordan

start her path in international relations, which ultimately led to a Master’s in global finance trade and economic integration.

Additional support they found along the way came in the form of female mentors, even if those women weren’t aware at the time of the impact they had on them.

Working for the Canadian Trade Commissioner Service, Jordan points to two women who she worked as an assistant for who were “a good touch point” for advice ranging from personal life decisions to handing her challenges they knew she was capable of tackling, even if she didn’t believe so herself.

“When the time was coming for me to leave [that job], they were very supportive and let me know what my strongest skills were and told me which job positions I was looking at would be best suited for me,” Jordan said. “While it wasn’t a formal mentorship, they were really good colleagues.”

Sparks named Heidi Peper, central region director of sales for Short Elliott Hendrickson Inc., as someone who has inspired her along her career path.

“At the point when I was not fully knowing what to do in my career, she encouraged me to apply for the Economic Development Association of Minnesota board and also encouraged me to get involved with a committee,” Sparks said. “She would throw stuff at me and assume I’d catch it, and since I admire her so much I didn’t want to let her down.”

Both women agree that there currently is a fairly good representation of women in their industry, though the environment can still sometimes breed competition among them.

“I think [the competition] puts this

idea in your head that maybe only one of us women will advance to a leadership role since they are more often than not held by men,” Sparks said. “As the industry continues to shift and you see more women working in it, hopefully we’ll continue seeing less of that.”

Despite this feeling of competition, Sparks said, “It’s really helpful to have another woman you can look up to as a mentor and answer questions because you’re going to encounter things in your

March April 2018

day-to-day career life that school does not prepare you for and you’re not going to know how to handle it or respond. It’s also important for women to know they need to do their part in helping build up the women around them.”

“Don’t be afraid to ask for help because – being only two years into this – there is a lot I didn’t know, and there are a lot of people who have answers,” Jordan added.

After finding their way to their respective specialties, Sparks and Jordan feel they have landed in careers where they are able to thrive and make the most of their skills.

“As someone who grew up in the suburbs and didn’t see a lot of this state, the opportunity to work with these shovelready sites and development programs – to get out and experience my state in a totally different way is awesome,” Jordan said. “[Our] job is ultimately solving a puzzle where there is no right way of completing it. It’s figuring out what is wrong and figuring out what you can do. You try things and sometimes they work, sometimes they don’t. No two business financing projects look the same, but through trial and error, you make it work,” Sparks said. “You also get to meet so many people, which is rewarding and fulfilling. Knowing you’re all working for this common purpose which is to grow the economy, create good jobs for people, to make this a more vibrant place for people to live and work.”

www.mrej.com/conferences

March April 2018

Minnesota Real Estate Journal

Page 7

Embracing the differences: How women are standing out today in Commercial Real Estate

By Angela Demonte, LEED AP CBRE, Inc.

T

he commercial real estate industry provides a vast array of opportunities for skilled workers. While the industry has been slower to move than others when it comes to ethnic or gender equality, companies are recognizing this and are working to close the gap. It takes more to standout in commercial real estate than being one of the only women in the room. While it’s still not common to be a professional female in real estate, many professional women are working to differentiate themselves from the competition.

I interviewed a female broker from a different market than ours out of Arizona recently because of the accolades I observed she was getting from inside the

CBRE organization where I work. I asked her poignant questions pertaining to her approach to stand out in the industry and she shared a path to success that worked for her in her respective market.

She distinguished herself by providing regular market knowledge in email campaigns, and would tie in any outside public relations attention she received from the media outlets in her area into these emails. She also focused on market knowledge pertaining to her interests and created a niche for herself. Since she is a broker out of Tucson, Arizona working in the retail market, she had an interest in finding larger vacancies to lease. She developed an email marketing campaign that shared information about big box spaces in her area, what was going on good, bad or indifferent.

Overtime, she became known as the ‘go to gal’ for big box opportunities in her

area. She distinguished herself from competing brokers male and female, and it worked!

I reflected on her story and thought, what was I doing to stand out? I realized that a majority of my work to differentiate myself from other brokers has been through the lens of sustainable development in commercial real estate. I have served as a public speaker for various events on the topic while relating it to standard trends in our industry. I’ve also developed email marketing campaigns for my clients with white papers, articles and media attention. These pieces were simultaneously shared through my professional LinkedIn account. Digital technology and social media make it easier than ever to connect with clients and potential clients. These are additional avenues for us as real estate professionals to build our personal brand and

share our specific market expertise.

Through this I have been able to establish myself as a prominent local contact for sustainable development initiatives in commercial real estate. This expertise in sustainable development has allowed me to branch out of working solely on retail projects by also getting engaged in industrial and office deals, where environmental due diligence, LEED certification or other green building techniques are utilized more often.

So ask yourself, are you ready to reinvent yourself? What are you doing to distinguish yourself from the pack?

Women In Real Estate Summit Friday, May 11, 2018 8:00 AM - 12:00 PM Program Golden Valley Country Club 7001 Golden Valley, Golden Valley, Minnesota 55427 8:00 AM Risks and Success Stories of Industry Pioneers in the Commercial Real Estate Industry • Early Pioneers: Making their way into a male dominated industry • The challenges in overcoming the paradigms in a male dominated industry • Looking Back: could the early pioneers have done anything different • Initial industry reaction to women in the business • The Vision for Women in Real Estate for the future

9:00 AM Lessons Learned from Leaders in Real Estate Today • Business owners discuss continued support for diversity with commercial real estate professionals • The types of education, networking and learning opportunities available to help compete and grow • Embracing the differences: How women are standing out today in the Commercial Real Estate Industry • Challenges in today’s market and solutions to overcome these obstacles • Trends in the commercial real estate market impacting women in the business

10:00 AM Break 10:10 AM Assessing the Gender Gap Across Real Estate Sectors • Real Estate Brokerage: Retail, Multifamily, Office, Industrial & Other • Real Estate Development: Deal Making & Advisory • Real Estate Construction: Leadership & Other Roles • Real Estate Professional Service Providers: Attorneys, Appraisers, Bankers & Others

11:05 AM Looking Forward: Commercial Real Estate Industry for the Future • Mentoring young women today that are interested in commercial real estate • Exploring and developing opportunities for women in real estate • The changes needing to occur to continue to improve the industry • Future Forecast & Trends: Shaping the Commercial Real Estate Industry • A Vision for the Industry and into the future

12:00 PM Adjourn and Networking

Register Online www.mrej.com/conferences

Page 8

Minnesota Real Estate Journal

March April 2018

Bridgewater From page 1

joined by the Bank’s board and leadership; our original founders; and first employees to close the market and ring the closing bell at the Nasdaq which is located in the New York’s infamous Times Square. It was definitely a once in a lifetime experience!

Approximately 6.7 million shares were made available during the initial public offering at $11.75 per share. As a result of the road show, where we visited five cities in seven days, Bridgewater and its shareholders raised a combined $78.7 million during the company’s IPO. Truly exciting was the fact that Bridgewater Bancshares, Inc, the holding company of Bridgewater Bank is the first Minnesota banking firm to go public in over 25 years.

Raising this capital, will allow the bank to continue its growth. It also provides a currency should we consider acquiring or merging with another bank. Additionally, this additional capital will raise the bank’s legal lending limit, allowing us to get in front of different opportunities and new relationships. Bridgewater is already poised to open a new branch in St. Paul this sum-

mer and has further plans for a new headquarters in a mixed-use development in St. Louis Park.

Our full-service commercial was bank formed in 2005 to serve commercial real estate investors, small business entrepreneurs and high-net-worth individuals. Commercial real estate lending has driven much of our organic growth. In fact, multi-family lending comprises 23% of Bridgewater’s loan portfolio, a fact that IPO investors found attractive.

Bridgewater’s total assets of $1.6 billion make it Minnesota’s ninthlargest bank by asset size.

MREJ: What’s most exciting about Bridgewater Bank going public?

Jerry Baack: The exciting part about all of this is we met with over 140 different institutional investors over a two-week period, a pace that’s rare in initial public offerings. The participation rate of the institutional investors who wanted to hear our story, and then make an investment, is a testament to a combination of our financial strength and our bank’s culture.

The numbers speak for themselves, but I can’t tell you how many times culture also came up in discussion with

investors. We heard many times, “What are you doing different than anybody else; describe your culture?”

We were able to tell a compelling story about our culture. We believe we have a solid team and an attractive opportunity for talent in the banking sector.

The Twin Cities hasn’t had a financial institution go public in over 25 years, a fact that generates excitement around here. As far as I know, I think we’re the only bank that went from scratch – starting from zero – to having a public currency in the Twin Cities.

Those things are an anomaly compared Bridgewater to page 10

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Minnesota Real Estate Journal

Bridgewater from page 8

to other large MSA. As a result, we’re very excited to be considered a market leader and be primed for growth. .

MREJ: What was the genesis behind going public vs. staying private?

Jerry Baack: It’s a number of things. Bridgewater historically sourced its capital locally, along with select private equity firms over the years. We were very successful raising money locally, and our investors were happy with our growth. In fact, we could have stayed private for quite a while. The timing was right to make this next step. We saw an incredible opportunity to continue expanding, take market share and the power of Wall Street would certainly provide the fuel for growth. In fact, over the last five years, we’ve grown at an average compound growth rate of over 32 percent. We’ve continued to take market share in the Twin Cities. If you look at the overall banking landscape of the Twin Cities right now, there is not another locally-led, publicly-traded bank. Many of the big players are headquartered outside of Minnesota.

We believe there will be opportunities in this market, driven by consolidation, and this IPO will give us the opportunity to be able to use a public currency that trades well and is attrac-

tive to acquisition or merger partners.

MREJ: So the idea is it’s more attractive for a merger partner to merge with somebody who has proven liquidity for their shares?

Jerry Baack: Correct. Think about it. If you’re a family-owned bank, you want to sell. Cash is fine, but when you cash out, you lose a lot to taxes. There is a definite tax advantage to being able to take someone else’s stock in return in a transaction. Furthermore, you get a partner with a locally led bank that has a long history of treating their customers and employees right, coupled with a great reputation in the market.

Compare that to bringing in a big consolidator or public company from out of state, which has a completely different feel.

That’s not first and foremost the reason why we went public. We went public to have additional capital to grow to the next level in this market organically, but we’re also well aware that we will have opportunities to also be a consolidator in the industry.

MREJ: Has there been a lot of consolidations in Minneapolis lately?

Jerry Baack: Yes. Central Bank was a very good competitor and they were bought out by Midwest One, which is a publicly traded bank in

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March April 2018

Iowa. Signature Bank was purchased

by Heartland Financial. Signature Bank has a similar business model to ours. It was just announced that Venture Bank is being purchased by Choice Financial out of North Dakota.

Not to forget, Anchor Bank is now Old National Bank; whose stock is a similar publicly-traded currency, but from a consolidator outside of our market. Anchor Bank then, a $2 billion bank with a number of locations and a really respected name in this area, is now under an out-of-state flag with a new name to this market. We feel these recent transactions represent the beginning of more consolidation likely to happen in the near term.

We feel that by being public and local, we can take advantage of coming consolidation opportunities and also be attractive to employees who may want to leave those organizations for a Minnesota based company that understands the local culture. We were founded here 12 years ago, and we’re still here.

Even though you can buy our shares on Wall Street, we’re still being led by a local management team who are making decisions locally. We feel that’s a sizable difference.

Jerry Baack: Commercial real estate is our biggest niche with apartments being the biggest part of that.

Twenty three percent of our loan portfolio is multi-housing. IPO investors were attracted to that and we will continue to focus on the Commercial Real Estate industry. Our legal lending limit will now be larger, giving us the ability to make larger loans than we were afforded in the past. Also, it gives us the opportunity to expand geographically and attract high-quality personnel.

MREJ: What else is important to convey to the commercial real estate community?

Jerry Baack: Minnesota is considered a phenomenal market and the commercial real estate market here is so entrepreneurial. That’s one main reason why we’ve been so successful.

The entrepreneurs in this market build their own portfolios for sure, but they really enjoy being in this market and building communities. We are drawn to that and have been a big part of it.

Going public has been an unbelievable experience for us, and we couldn’t be more proud to be out there telling the story of the Twin Cities.

MREJ: How will the bank’s IPO impact the local commercial real estate community?

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Minnesota Real Estate Journal

March April 2018

South Loop from page 5

Mall of America. New housing is scheduled to break ground, and even a WhirlyBall facility is under construction.

Here’s a rundown of some current activity: Water park plans making a big splash Mall of America owner Canada-based Triple Five Group is looking to add a huge water park just east of the mall that the city of Bloomington would pay for and own.

At 225,000 square feet, the proposed $150 million to $200 million water park would be one of the biggest indoor water parks in North America. It would be open to the public. Rudlang stresses the proposal is in very early stages.

According to the proposal, the city would finance, own and collect the profits from the park and hire Triple Five to operate and manage it. Mall owners hope to land a big, international brand -like DreamWorks or Nickelodeon -- to be part of the project.

Mall owners say the water park would help add vibrancy and resiliency to the mall by bringing in new visitors. Triple Five also owns the West Edmonton Mall in Alberta, Canada, where it operates the 215,000-square-foot World Waterpark, which brings in more than 500,000 visitors annually. The design of the Bloom-

ington park appears to be heavily influenced by this project.

In addition, Triple Five is in the midst of building the American Dream Meadowlands mega-mall in New Jersey, which will feature a massive water park.

Rudlang says Triple Five has been interested in having a water park as part of Mall of America for years. They believe offering more entertainment will help the mall compete with big retailers like Amazon.

“A water park and more entertain-

ment have been in the mall’s plans for over 10 years,” Rudlang says. “In the last year or so, we’ve talked about it more and how to finance it. The mall is interested in adding entertainment to the project, and we agree with that because of pressures like Amazon and internet shopping. The mall is a big part of our tax base, and keeping the mall healthy behooves us as shepherds of Bloomington’s tax dollars. So it’s a collaboration.”

According to a mall spokesperson, “We continue to explore opportunities

with the city of Bloomington to determine the best way to continue growing and developing Mall of America and its surrounding properties to remain a vital worldwide destination. We are in the preliminary stage of exploring possibilities together.”

MOA luxury expansion still in planning stages Mall of America continues to pursue a luxury expansion to the north of the South Loop to page 14

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Minnesota Real Estate Journal

mall; however, it appears to be contingent upon financing and leasing.

Triple Five and Minneapolis-based Ryan Cos. US Inc. – acting as developer/general contractor-- first proposed expansion plans called “The Collections at MOA” in 2015. Plans called for a $500 million addition that would add 580,000 square feet of luxury retail, a 180-room luxury hotel, 120 residential units above the hotel, a multi-story office building, a parking structure, and possibly a health club. (For the hotel, there have been rumors that it could be luxury brand like a Four Seasons or Waldorf Astoria).

“Whether that project will move forward or not is unknown because of the private financing market,” Rudlang says.

The mall has preliminary approvals in place for development on that north side. Mall officials had no comment on the expansion.

of Mall of America, near the Blue Line station. The development started back in 2005. The first phase was The Reflections, which is two 17-story condo towers with 263 units.

“Then the recession hit and everything, including that project, went stagnant for awhile,” Rudlang says.

But activity picked back up and the second phase opened in spring 2016.

That phase is the 302-unit Hyatt Regency Hotel. The third phase is the six-story IndiGO apartment building, which has 396 market-rate units with an attached above-ground parking ramp, which opened in late summer 2016.

Now the fourth phase is a six-story, 400-unit apartment building that’s currently making its way through the entitlement process. St. Paul-based McGough is the developer and will break ground some time in 2018, Rudlang says. The project will include 607 parking stalls and 3,900 square feet of commercial space. McGough could not be reached for comment.

Next phase of Bloomington Central Station development is moving along Moving off of the mall, the other large, mixed-use development in the South Loop is the Bloomington Central Station, which is a total of 50 acres.

The development is a few blocks east

Dual-branded hotel and WhirlyBall facility are under construction A four-story, 182-room hotel that will be dual branded with Hilton’s new budget-friendly Tru flag and its extended-stay flag -- Home2Suites -- is under construction at 2435 E. Old Shakopee

South Loop from page 12

Road, kiddy-corner from Mall of America.

The developer is San Antonio, Texasbased Baywood Hotels. In addition, a 35,000 square-foot WhirlyBall facility will be attached to the hotels. WhirlyBall is a bumper car game that has elements of basketball, hockey and lacrosse. WhirlyBall facilities also typically have a restaurant and other games like bowling and laser tag. The project will open in 2018.

Hotel boom continues near MOA The 148-room AC Hotel Bloomington Mall of America opened in early 2017 at the corner of 26th Avenue South and Lindau Lane, east of the mall. The next phase of the development was a new restaurant and retail building where Hazelwood Food & Drink and The Grind Coffee & Creamery recently opened.

“We worked hard to get the coffee shop in there and make the project mixed-use,” Rudlang says.

A grocer or market may be a future phase. “We’re still trying to get a market component– either a pharmacy or small grocery story-- to add vibrancy to area,” Rudlang says.

In 2016, Marriott TownePlace Suites opened adjacent to the new AC Hotel.

More phases of development will occur

March April 2018

as more land is marketed. For example, there’s about an acre of developable land next to the AC Hotel.

Plans for new Cambria Suites move forward In another hotel project, Choice Hotels International Inc. is moving forward with plans to build a 160-room Cambria Suites at 28th Avenue South and American Boulevard. Plans for construction were approved. Choice Hotels inked a deal for the land with the Metropolitan Airports Commission. Construction is anticipated to start this spring.

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Minnesota Real Estate Journal

March April 2018

DMC From page 1

Rochester represents,” Seeb continues.

“For many years, Rochester has been a very successful city. Mayo continues to grow and it has done well, but it has largely relied on local investments for its growth. What the DMC initiative has done is led to a confidence in the market here that has attracted capital certainly from the Twin Cities and also from outside the Minnesota market. It has attracted capital from Chicago, from Boston, California, Florida. It’s new money flowing into this state, investing in this state and supporting the growth. It’s doing so because it believes there’s demand that’s being fueled mostly by Mayo’s growth, but also by the willingness of the state and the city to invest in public infrastructure.”

Many projects are underway With the DMC designed as the global center for medical care, Rochester needs additional infrastructure, transportation, hotels, retail, restaurants and entertainment.

To date, 21 projects have recently been completed, are underway or proposed in the approximately 550-acre DMC development district. “All of

those are in response to real market demand,” Seeb says.

The DMC’s master plan calls for 2,200 to 3,100 units of new for-rent and for-sale housing, 200,000 square feet to 348,000 square feet of retail/entertainment space, 1,300 new hotel rooms and commercial research and technology space.

The DMC development district is centered around six sub-districts. A variety of development projects are underway, leading to an endlessly changing Rochester skyline. Many of the projects are being led by Twin Cities developers.

“It’s been very impressive to see the larger development firms that have started to be active in our community,” says Bucky Beeman, licensed agent and partner at Rochester-based Realty Growth Inc. Beeman points to the city’s booming apartment development market as well as new retail and restaurants.

“We’ve seen more retailers and restaurants come to downtown and I think we will continue to see more,” Beeman says. “We’re getting interest from people around the state and out of state looking at different opportunities,

but I’m also happy to see some of the downtown growth of small business owners.”

Here’s an update of some of the biggest projects in three of the DMC’s sub-districts:

Discovery Square subdistrict Discovery Square (phase one) Golden Valley-based M.A. Mortenson broke ground in October 2017 on a DMC to next page

January 2017

four-story, 90,000-square-foot life sciences building that will anchor the 16block “Discovery Square” sub-district, which will be a life sciences and biotech hub. The new building, which will house laboratory space, offices and research space, is being constructed at the corner of Fourth Street Southwest and Second Avenue Southwest. Mortenson was selected in September 2016 to lead development of Discovery Square.

Over the next 20 years, DMC plans to add 2 million square feet of space in Discovery Square for research, education and product development. DMC officials say Discovery Square will be the keystone to the DMC economic development strategy. They’re hoping this new $35 million building will attract other national research companies that want to be near Mayo Clinic.

The building will be anchored by Mayo Clinic, which will take approximately one-third of the rentable space.

Jeremy Jacobs, director of real estate development at Mortenson, says additional tenants will likely be named soon.

“We think we’re very close in terms of being able to make formal announcements and really begin to show the hard work we’re doing to bring new companies, new professionals and new tax base to the market,” Jacobs says.

He says the opportunity for tenants to locate alongside the world-renown Mayo Clinic is “clearly unlike any expe-

Minnesota Real Estate Journal

rience you could get anywhere else in the world.”

The building was designed by RSP Architects and HOK, and Colliers is the leasing agent. The building is scheduled to open in April 2019.

Jacobs says Mortenson saw this development as a big opportunity.

“With the advent of the Destination Medical Center back in 2013, the entire market saw an opportunity and rightfully so,” he says. “Mayo’s strategy of a

destination healthcare practice completely aligned not only with what the state and region needed, but what the country needs right now in terms of its expertise and specialty research… Now construction permits are exploding in the area, and I think we’re going to continue to see a great deal of interest in that market, particularly… as new companies come to the market to partner with and alongside Mayo Clinic.”

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Urban on First project Rochester-based Titan Development & Investments and Minnetonka-based Opus Group broke ground in March on a 154-unit apartment development in downtown Rochester in the Discovery Square sub-district.

“Located just steps away from Mayo Clinic's main campus in downtown Rochester, this development marries convenience with unique/high-quality amenities for local residents," said Matt Rauenhorst in a released statement. He’s vice president and general manager at Opus Development Co. LLC. “Our combined Opus and Titan team will bring urban living to a new level in Rochester, and we're thrilled to be a part of the city's and DMC's vision for the area."

The $38 million, six-story building will include 9,000 square feet of groundlevel retail space. First-level amenities will include bike storage, a dog wash and resident parking. The second level will include a swimming pool, green roof space with seating, a club room and fitness center. Units will feature highend finishes. The project is scheduled to open in summer 2019.

St. Mary’s Place sub-district Alatus project Minneapolis-based

Alatus

LLC

DMC to next page

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March April 2018

DMC from previous page

recently broke ground on a $125 million, 13-story apartment tower adjacent to Mayo Clinic’s St. Mary’s hospital campus where The Brentwood hotel (formerly known as The Blondell) and Ray-Mar Motel once stood. The development site – at 406 Second St. SW -- is 2.83 acres and includes 14 taxable parcels that were assembled, says Chris Osmundson, director of development at Alatus.

The yet-to-be-named tower will have 350 units including apartments and rental townhomes. The ground floor will include restaurants and retail with office space and additional retail planned for the second floor.

“Right now, we’re trying to wrap up bringing on board sort of a co-working tenant [for the second floor]. That would be really cool to get in there with the adjacency to St. Mary’s,” Osmundson says.

Amenities will include a third-story rooftop pool and indoor sauna, outdoor grilling stations, fire pits, a fitness center and on-site pet park. Osmundson describes it as an “urban, integrated-living concept.”

The building is scheduled for completion in March 2020.

Downtown Waterfront subdistrict Bloom Riverfront Towers Developer Bloom International Realty of United Arab Emirates is working its way through the approval process for an approximately $250 million, approximately 900,000-square-foot, mixed-use waterfront development composed of two high-rise towers. The towers will include 130 condos, a 180-room fourstar hotel and 215 units of senior hous-

ing. The towers will be built atop of ground-level retail, restaurants and a parking garage. The site runs along the Zumbro River from Second Street SE down to Fourth Street SE. The project is the biggest private development proposed since the implementation of the DMC initiative.

Hilton Hotel A $125 million, 264-unit, upscale Hilton Hotel is under construction at South Broadway and East Center Street.

Developers are Titan Development & Investments and Chicago-based Harbor Bay Real Estate Advisors. The 19-story hotel includes ballrooms, conference rooms and 15,000 square feet of retail space. The hotel, which will connect to the downtown skyway system, is slated to open in spring 2019.

March April 2018

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Page 19

Remembering the Unsinkable Jon Hempel

By Clare Kennedy Minneapolis / St. Paul Market Reporter CoStar Group

W

hen Josh Krsnak met the late Jon Hempel, he had some modest hopes of owning a duplex. Little did he know that Hempel would draw him into a real estate investment empire with $750 million in completed transactions to its credit.

“He was never timid or fearful of anything. He’d take on the biggest challenges, the biggest deals, and say ‘I don’t know how it’s going to work out, but for some reason I think it will,’” said Krsnak, who is now CEO of the company Hempel founded, Minneapolis-based Hempel Cos. “And it did.”

Hempel died April 5 at the age of 47 after battling brain cancer for three years, according to his family. He leaves behind his wife, Heidi Harrington Hempel, two sons and a sevenmonth-old baby girl.

He also leaves behind a lengthy and distinguished resume. In addition to founding Hempel Cos., before he turned 44 he had four other ventures under his belt, including a construction business, a title company, a Century 21

Jon Hempel real estate franchise and NorthStar Midstream, which specializes in the transportation of oil and natural gas.

Keith Jonathan Hempel II grew up in Elk River, a town of about 22,000 that sits on the banks of the Mississippi River about 30 miles northwest of Minneapolis. Dave Bleyhl, who taught Hempel economics and government at Elk River High, described him as a quiet but driven student.

“He was very hard-working,” Bleyhl

said on Thursday.

Hempel moved to the Twin Cities in the late 1980s for college, graduating from St. Paul’s Hamline University in 1993 with a degree in economics.

He started his career at the Minneapolis architecture firm, The Cuningham Group, where he played a key role in forming Cuningham’s construction practice. From there he moved on to a project management position at the Minneapolis-based tenant representation firm Nelson Tietz & Hoye (NTH).

In 2001, he left to start Hempel Cos. It was a big risk to take, said Tina Hoye, president and principal at NTH. “We really admired what he did,” Hoye said on Wednesday. “He really persevered and I think he was creative and diligent to get through that.”

Krsnak was 22 when he met Hempel at a real estate licensing class in 2002.

At the time, Hempel Cos. consisted of just Hempel himself, then just 30 years old, and a single accountant who worked four hours a month.

It was a shoestring operation, but Hempel had big plans, which he outlined over a series of breakfast meetings with Krsnak. The idea was to put investors together to buy ailing buildings, renovate them, and then resell

them at a tidy profit.

“It was pretty easy to start drinking that Kool-Aid. He was a huge optimist,” Krsnak said. “No matter how bleak it seemed, for Jon the glass was never half full. It was up to the top all the time.”

“Jon taught me that you have to think bigger” - Josh Krsnak

Swayed by Hempel’s conviction, Krsnak joined Hempel Cos. as the company’s first full-time employee that July, on the promise of earning 20 percent of the company’s profits rather than a set salary.

The following year was “a little rough” Krsnak said with typical Minnesotan understatement. His 20 percent Hempel to page 21

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March April 2018

Community Spotlight

Costco Wholesale Selects St. Cloud Location: Surrounding Prime Real Estate Still Available

E

ver heard the amazing story about how train tracks were laid through the Alps before there was even a train that could go there? Well, this story is a tiny bit similar in that the interchange at 33rd St. So. and Trunk Highway 15 in St. Cloud was built before there were any considerable retail landmarks. But that’s about to change.

In March of this year, Costco Wholesale —the popular members-only bulk retailer entered into a purchase agreement with the City of St. Cloud for approximately 19 acres along the mostly undeveloped corridor. Average daily traffic along the Trunk Highway 15 corridor is projected to rise from 2,000 to more than 12,000 as residential and commercial development interest continues to grow. Medical facilities, office buildings, daycare centers, banks, and restaurants are just some of what has been speculated.

“We knew it would be beneficial for the residents of our City,” said Cathy Mehelich, Director of the St. Cloud EDA. “There has been a long-time request for Costco in St. Cloud, and it’s a good fit based on the location and access to customers in the Central Minnesota trade area that are currently driving to Brainerd/Baxter or Maple Grove for these amenities.”

Costco’s projected 2019 grand opening timeframe comes just months ahead of the opening of a brand new high school being built just down the road. Tech High School (part of Independent School District 742—a group of 13 schools serving 10,000 students) passed a referendum in the fall of 2016 to build a new facility within St. Cloud’s primary growth area. The completed build will relocate 1,800 students to a cutting-edge 116-acre campus. To sum up the project’s goals, Superintendent of ISD 742 Willie Jett said, “During the referendum campaign, we repeatedly reminded people that we weren’t just building a school; we were building futures.”

Historically speaking, familyfocused residents tend to follow new schools, and St. Cloud’s Community Development Director Matt Glaesman confirmed the rise in residential building permits, which were beginning to spike already in the spring of 2017.

“After many years of planning, we’re thrilled to see that the time has finally come to develop this area,” said Glaesman. “We expect residential development to generate more than 2,000 housing units within a mile of the school site, and more than 1,000 acres are guided for residential development beyond that area.”

As for the king-sized retailer’s land purchase, Costco settled on a 19-acre parcel, and plans to construct a 153,000 square-foot building, where its shopping facility will reside alongside its projected 9,000 square-foot liquor store and a near-by gas station. For their substantial building efforts, Costco will revel in the bountiful established market of Central Minnesota consumers—a retailer’s dream come true.

According to Crossroads Center, a regionally-renowned shopping mall connected to the 33rd Street and Highway 15 interchange by way of a direct thoroughfare, the 2017 Trade Area Demographics are as follows: • Trade Area Population: 393,499 • Number of Households: 147,428 • Households with income of $75,000+: 38.7% • Households with income of $100,000+: 23.3% • Average household income: $75,168 • Number of residents with a Bachelor’s Degree+ (AGE 25+): 24.2% This means, even if not from the straightforward routes of I-94, Costco will be well-within driving range of shoppers from all directions of the state. They can certainly count on traffic flow similar to Crossroads Center,

which regularly pulls a crowd from a 90-mile radius, primarily from the north and west.

“Drawing shoppers from such a large radius is unique,” said Darcy Eigen, General Manager of Crossroads Center. “It presents a great customer base for our wide variety of mall tenants.”

To take you on a full-circle tour of St. Cloud’s shopping potential, we couldn’t leave out the city’s historic downtown. That’s where consumers have the chance to visit a growing business and profession service district, while enjoying a lively entertainment scene and a diverse restaurant and brewery menu.

The population of Central Minnesota itself is growing at a steady rate each year, partly due to St. Cloud becoming more of an attraction for families overall. For one thing, cost of living is substantially lower than being in the Twin Cities and its metro area. For another, a multitude of employment opportunities exist within St. Cloud. Put those two together, and you’ll see a continuing high number of former commuters relocating to Central Minnesota, and ultimately becoming local regulars— for both Costco and other smart retailers.

Interested? You’re in luck, because

many large and small sites are still available for development right within this St. Cloud hotspot in addition to redevelopment opportunities along Division Street/Highway 23, and affordable Shovel-Ready Business Park sites on I-94 and near the St. Cloud Regional Airport.

Anyone interested in development opportunities here on the south side of St. Cloud or other areas of the city should contact Cathy Mehelich, Director of the Economic Development Authority, by calling 320-650-3111 or emailing cathy.mehelich@ci.stcloud.mn.us.

Cathy Mehelich has more than 20 years of municipal economic development experience in St. Cloud, Elk River, and Olivia, Minnesota. Since she was selected in 2011 to lead the City of St. Cloud’s creation of its first Economic Development Authority, she has facilitated a variety of business expansions and attraction projects.

March April 2018

Minnesota Real Estate Journal

Page 21

Technology Spotlight

Building An Online Reputations Management Program

By Alexander Rogers Principal broker and co-founder of East West Property Management

So, how do I manage my online reputation?

1) Make sure you can be found online. Ensuring your business profiles are set up on most popular platforms is the first place to start. The most heavily used review websites are Google, Facebook, Yelp, and the Better Business Bureau.

A

nyone who thinks online reviews are not important for the property management business is mistaken.

Some of the most significant innovations in residential property management are not real estate specific. And none of which are as critical as the review platforms where product and services can be rated. In today’s connected world, information travels fast and with this comes unique challenges and opportunities.

The importance of online reviews is not confined to any one industry or market. The ridesharing and transportation company, Uber, places great emphasis on the feedback they get from their riders to ensure their product experience is excellent. According to Uber’s terms and services agreements with their drivers, the drivers are required to stay above a minimum rating level, reported by Business Insider as 4.6 out of 5 stars, or risk their driving account with Uber being deactivated.

Property managers should be just as diligent in protecting their brand and ensuring tenant satisfaction as Uber is with their customers. This can be done by developing a thorough online reputation management program. A robust online reputations management program goes well beyond another type of customer service response channel. If executed well, an effective reputation management strategy can provide

Alexander Rogers insight into the changing trends of the tenants. By analyzing feedback and reviews, management can detect patterns in amenities, services, layouts and other features important to the tenant base to stay ahead of the competition.

Property managers need to continue to adapt the way they attract and retain tenants. Renters usually start their search for an apartment online. If a prospective renter sees the property manager has high ratings and is genuine in their interactions online, that property manager now has a leg up on the competition. Property owners, investors, and developers in the market for property management services usually start their due diligence process online, too. A property manager’s poor online reputation can scare future clients away just as quickly as future tenants.

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2) Monitor relevant online activity. If the accounts are properly set up on the previous platforms, email notifications should be sent out anytime a person posts a review. However, the internet is a big place and people may be talking about your business elsewhere.

Through Google Alerts, the search engine will send an email when a chosen keyword is detected on Google.

Property Managers can use their property names, addresses, and other defining keywords to track related activity online.

3) Respond promptly to every review. A series of articles can be written on how to respond to reviews, especially negative reviews. Things to consider when forming a response is to make sure your message is genuine. Be accountable, transparent, and demonstrate that the reviewer has been heard.

Your response matters and keep in mind your response is not just for the

Hempel from page 19

cut ended up being $8,000. To make ends meet he ended up renting out all three bedrooms of his townhome while he himself slept in a janitorial closet at a small office building the company owned in Plymouth. Nevertheless, Krsnak never lost faith, largely thanks to Hempel’s unshakeable poise and confidence.

“He was very smart, very measured, very calm. You could never rattle him,” Krsnak said. “I never once heard him raise his voice or get visibly angry. He always carried himself so well.”

Their luck changed when they landed a deal representing a 1031 exchange buyer, which netted them just enough to put earnest money down on new projects.

By 2006, the company was on the ascent, getting notice for its ambitious building projects and high dollar deals. One of Hempel Cos.’ early successes was the redevelopment of the Midland Bank Building in downtown Minneapolis, which it transformed into the 222-room Hotel Minneapolis in 2007.

The firm has also owned - and sold

person leaving the review, but the general public that will also read your response.

4) Be proactive. Instead of waiting for reviews to be submitted, consistently ask your tenant base what can be done to make their tenancy more enjoyable. By being proactive offline and going over and above, the tenants are more likely to leave positive feedback online.

5) Do not incentivize or pay for reviews. As property managers are starting to understand the importance of a positive online reputation, some are looking for ways to cut corners. We have heard of property management groups offering prospective tenant’s waived application fees if the prospect leaves a 5-star rating. Not only has this person not had a substantive experience to review yet, but the property manager is also at risk of violating federal consumer protection law. The Federal Trade Commission takes reviews generated by incentives and compensation very seriously.

An active Online Reputation Management strategy will keep you from playing brand defense and allow your stakeholders to become your brand advocates. Every review is important and provides an opportunity to grow your online reputation.

- an array of large properties in the Twin Cities’ core business districts, including St. Paul’s UBS Plaza and Minneapolis’ Soo Line building, Canadian Pacific Plaza, and Rand Tower.

In 2013, Hempel embarked on a new venture - NorthStar Midstream and turned operations of Hempel Cos. over to Krsnak, who had already begun the process of buying him out.

Though it has been years since Hempel had direct control of his pseudonymous company, his bold approach is still very much a part of its investment philosophy. Most recently, the company finished a $71 million renovation of the former Macy’s department store in St. Paul, turning the aging building into an office and retail complex topped with an ice rink used by the Minnesota Wild hockey team as a practice facility.

“Jon taught me that you have to think bigger,” Krsnak said. “You can’t get stuck on a duplex, because one little transaction takes as much work as a big one.”

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March April 2018

JERSEY MIKE’S ACCELERATES FRANCHISE DEVELOPMENT AND EXPANDS NATIONWIDE PRESENCE IN 2017 Leading Fast Casual Sandwich Concept Opens Over 170 New Restaurants and Reports 16th Consecutive Quarter of Positive Growth Jersey Mike’s Subs announced today that it opened over 170 new stores and achieved a six percent system-wide same-store sales increase for 2017. The fourth quarter of 2017 marked its 16th consecutive quarter of positive growth.

“Since the original store opened in ‘56, we’ve never wavered from the values that have been our company’s foundation since day one, and we’re proud that this commitment to excellence has translated into tremendous success for our brand,” said Hoyt Jones, president of Jersey Mike’s. “From the high-quality product to our company culture,

Minnesota Real Estate Journal

every aspect of the Jersey Mike’s brand is rooted in authenticity, which has helped us develop a passionate following from consumers nationwide and stand out as a leader in the fast casual segment.”

Jersey Mike’s product quality and people led to a surge of franchise and corporate development in 2017, and in addition to the 170 new locations opened throughout the year, the company also signed franchise agreements to open an additional 160 restaurants in 2018. Of that development, 60 percent came from within the system, which is a direct reflection of the company’s efforts to prioritize its existing franchise network and enable their growth. Jersey Mike’s recent growth landed the brand the #1 ranking on Franchise Times’ 2017 Fast & Serious list, naming the company the smartest-growing brand in the industry.

“Coupled with our strong franchise

development pipeline, the exceptional success we experienced in 2017 has positioned Jersey Mike’s for continued growth in 2018, and we look forward to accelerating this momentum and continuing to take the brand to new heights,” said Jones.

This year, the fast casual sub sandwich franchise plans to open 200 restaurants nationwide and currently has franchise opportunities across the U.S. in markets such as Chicago, St. Louis and Kansas City, among others. Jersey Mike’s is aiming to have more than 2,000 stores open nationwide by 2020.

The company is also placing a focus on its nontraditional development and aggressively seeking to expand its presence in in major airports, universities and sporting venues throughout the country.

Page 23

THE LINK REDEFINES LUXURY LIVING IN THE TWIN CITIES Stevens Construction Corp., a fullservice, Minnesota-based general contractor, is pleased to announce the recent opening of the final phase of The Link.

Located at 2929 University Ave SE in the Prospect Park East River Road Neighborhood, the 530,550sf multi-use project includes 336 apartments, 31,026sf Fresh Thyme grocery store, 9,254sf of retail/restaurant space, and two levels of underground parking.

Other amenities include a roof-top amenity deck, dog run (on roof), an array of interior recreational spaces including a golf simulator room, Fitness center, Yoga room, Sauna, and tanning.

The multi-phase project included a 7story building which completed in October 2017 and a 14-story building that Breaking Ground to page 34

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Minnesota Real Estate Journal

March April 2018

Thank You! Thank you to everyone who nominated over 225 projects and people for the 2018 Minnesota Real Estate Journal Awards and thank you to the 400 people that attended this a fantastic event!

See the list of winners on the following pages Urban Apartment Winner: Millworks Lofts Located on Hiawatha Avenue near the Blue Line LRT platform, Millworks Lofts is a redevelopment of a historically significant industrial site into 78 units of affordable housing. The complex, which includes a factory, warehouse, and lumber shed, originally housed the Lake Street Sash & Door Company, a millwork company established in 1916. Units at Millwork Lofts provide modern amenities while showcasing the historic character of the buildings, with exposed brick walls, tongue and groove wood ceilings, and in some cases, restored original wood windows. The three-story brick and timber building houses most of the apartments, while the adjacent lumber shed has been transformed into a multi-use space with a large community room, fitness room, yoga studio, and leasing office. The shed also offers 20 indoor parking spaces, a bike storage area, and individual storage lockers. A smaller community room and patio are located on the rooftop.

Finalists: Lyndy Apartments The Finn Spectrum Millworks Lofts 333 Hennepin

Suburban Apartment Winner: The Moline The Moline is located in historic downtown Hopkins, Minnesota, a dynamic 17,000 resident first-ring suburban community 10 minutes west Minneapolis, Hopkins, rich in tradition and growth, offers the advantages and conveniences of a large city and the security of a small town. The Moline is just steps away from Hopkins’ historic Mainstreet, a popular and vibrant commercial corridor that features walkable spaces and a mix of entertainment and retail options; and directly across from a future station of the region’s Southwest Light Rail Transit (SWLRT) Green Line Extension that will operate between downtown Minneapolis through Hopkins and southward to Eden Prairie. The six-story residential community includes 239 apartments and 2 guest suites and more than 35,000 square feet of amenities. Among the amenity spaces are a club room, fitness center, business office, pet run and two entertainment suites offering chef-quality kitchens and full dining and lounge areas. In addition, there is a private rooftop lounge, an indoor spa and sauna, and a nearly 19,000 square foot outdoor terrace that includes a pool, putting green, bocce ball court, grilling stations, lounge area and firepit.

Finalists: Onyx Apartments The Moline Park Place The Landing 610 West

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Minnesota Real Estate Journal

Industrial/Science/Manufacturing Winner: Northern Stacks As the Twin Cities’ largest active in-fill commercial redevelopment, Northern Stacks is located minutes from downtown Minneapolis and features 1.75 million square feet of build-to-suit space. Designated as a US Environmental Protection Agency Superfund site, the 122-acre former home to the Northern Pump Company has a rich history combined with a bright future. The redeveloped site features a modern, sustainable design and LEED-ready construction, rail access and fiber connectivity. In a nod to its history, the site retains the original smokestacks that display the Navy Battle E awards received during World War II. Northern Stacks is a flexible build-to-suit site that can accommodate a variety of different uses such as industrial, office or data centers. Once the redevelopment is complete, the new property tax base will reach over $100 million and add 3,500 new jobs and $450,000 in new property tax revenue. The property is currently 95% eased.

Finalists: University of MN Main Energy Plant Northern Stacks

March April 2018

March April 2018

Minnesota Real Estate Journal

Senior Housing Winner: St. Therese of Woodbury Saint Therese of Woodbury is a 280-unit full continuum of care senior community setting consisting of senior apartments offering a full range of independent, assisted living and memory care apartments. In addition, the campus features private care suites offering specialized long-term care and short-term transitional care in neighborhood settings. Most recently St. Therese completed its second phase which includes 64 independent living brownstones; “The Redwoods” is located immediately to the south of the 216-unit first phase. One of the key factors in choosing the location for St. Therese was the work that the City of Woodbury had done in its “Urban Village” master plan, which envisions a high density residential component. St. Therese was attracted to the proximity and walkability to several amenities, including grocery, clinic, financial and other personal services.

Finalists: St. Therese of Woodbury GracePoint Crossing – in Cambridge Shorewood Landing Senior Living Zvago – in Glen Lake River North Senior Apartments

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Medical Winner: HCMC Clinic and Specialty Care The Hennepin Healthcare Clinic and Specialty Center (CSC) is a six-story structure with a 7th level penthouse and two lower parking levels below grade with approximately 200 parking spots. This multi-story building contains approximately 377,888 gross square feet, and includes a skyway and tunnel connecting to Hennepin Healthcare’s campus. The building footprint is bordered by Chicago Avenue South, South 9th Street, Park Avenue South and South 8th Street.

Finalists: TRIA Orthopaedic Center Woodbury HealthEast Clinic & Specialty Center Twin Cities Orthopedics Woodbury Minnesota Eye Consultants, Woodbury HCMC Clinic & Specialty Care

Redevelopment - Apartment Winner: Millworks Lofts Millworks Lofts is a 78-unit affordable housing development in South Minneapolis on Hiawatha Avenue. This development provides much needed affordable housing to the Hiawatha Corridor, just a block and a half from the 38th Street Station of the Blue Line Light Rail. The units are set-aside for households that earn less than 60% of the area median income and rents are also capped at that level. The project has one, two and three-bedroom floorplans and units feature solid surface countertops, stainless steel appliances, concrete floors and washer and dryer units in every apartment. Common amenities include a covered garage and onsite surface parking, main-level and rooftop clubrooms, fitness center, yoga studio, bike storage and workstation and resident storage lockers. In addition to providing affordable housing to the Longfellow Neighborhood, this project involved the preservation and repurposing of the former headquarters of the Lake Street Sash & Door Company. This company was one of the major millwork companies to utilize Hiawatha Avenue and the adjacent railway during the early 20th century. Many of the windows that were restored as part of the historic rehabilitation were in-fact milled and installed by the building’s original tenant.

Finalists: The M on Hennepin Millworks Lofts Balsam Hill Apartments Kraus Anderson Block Spectrum

Redevelopment, Non-Housing Winner: Treasure Island Center, Saint Paul This unique redevelopment project saw the transformation of a 1960s-era department store into a modern, 540,000 sq. ft. mixed-use facility offering office, retail, service, entertainment and experience under one roof. It’s this blend of tenants that drives the success of Treasure Island and connects the activity surrounding the Lowertown neighborhood (near CHS Field) and West 7th Street (near Xcel Center) with the heart of downtown Saint Paul. Current tenants include the Minnesota Wild, Hamline Piper’s Hockey, Walgreen’s, TRIA Orthopaedic and Minnesota Housing. Tenants coming soon include Stacked Deck Brewing, Cancun Billy’s, Tim Hortons and Treasure Island Resort and Casino.

Finalists: LuMINN Hotel Miller Textile Minnesota State Capital Treasure Island Center Kraus Anderson Block Baker Center Re-Positioning

March April 2018

March April 2018

Minnesota Real Estate Journal

Retail Winner: MSP Airport – Re-imagined Minneapolis-St. Paul International Airport (MSP) sought to redevelop its commercial space to deliver convenient access to ontrend products, services and restaurants for the 38 million travelers that pass through each year. To shape the retail mix, the Metropolitan Airports Commission (MAC) determined uses for each commercial site balancing the travelers’ needs with the desire to showcase the best that Minnesota has to offer. During development, boundaries were pushed both literally with indoor patio extensions and figuratively with breathtaking design. Throughout the course of the year, MSP opened 35 new retail stores and 15 new restaurants—delighting visitors and filling Minnesotans with pride. MSP’s goal is to provide a balance of offerings to the traveling public based on price point, food choices, and shopping experiences with a mix of both national brand and local small business representation.

Finalists: Central Park Commons CityPlace, Woodbury MSP Airport - Re-imagined Miller Textile The Finn the M on Hennepin

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Minnesota Real Estate Journal

Greater MN Winner: Digi-Key distribution center, Thief River Falls Digi-Key hired JLL to assist in site selection and strategic planning for a new distribution facility of over 1Million SF in the Midwest to accommodate their growing business. Beyond identifying building opportunities or development sites, JLL compiled a team of experts in labor analytics, logistics, economic incentives, project development services, and brokerage in order to identify the best site options for Digi-Key. The JLL team identified a shortlist of top options in five Midwest states. Based on the findings of the labor analysis and incentives availability, the best option for Digi-Key ended up being the vacant space adjacent to their site in Thief River Falls, MN. JLL helped Digi-Key purchase additional parcels of adjacent land from the city in order to accommodate their new facility. By working with the city of Thief River Falls and Pennington County, JLL helped secure one of the largest state incentive packages in MN history, securing long-term tax relief and grant money for the development. Our PDS team is currently managing the project.

Finalists: Digi-Key Distribution Center Rochester International Airport Expansion Artspace Hastings River Lofts Hubbard Building

Interior Design Winner: Jack Link’s HQ Jack Link’s began to move their operations to Minneapolis in 2005. Since then, the largest protein snack company in the world has seen extraordinary growth and was ready to increase their visibility. The goal? Create a new headquarters that reflected their brand, enhance the customer and team member experience while promoting connectivity to their innovative process. There would be no better location for their 77,000SF space than the newly renovated, highly-visible corner of Mayo Clinic Square, bringing not only office, but a retail test kitchen, connecting the CBD and Entertainment District. We proposed a design that honors both their rich northern Wisconsin heritage and history as pioneers in their industry. Larger-than-life environmental graphic design illustrates the Jack Link’s story, weaving elements of corporate history (collaging archived newspaper articles and advertisements) and bold culture (commercial storyboard sketches and the evolution of sasquatch) throughout the office walls. Semi-transparent trees overlaid on glass brings the outside-in, captivating those passing by. Reclaimed barn wood offers an authentic Northwoods vibe, combined with red and black plaid details, an 8’ tall sasquatch statue and a hand-branded logo created with custom branding irons, prominently displayed in the main lobby.

Finalists: Miller Textile Building The Finn Millworks Lofts Jack Links Headquarters The Lexington

City of the Year Winner: Woodbury Woodbury has seen tremendous growth in the commercial real estate sector. Medical office projects include TRIA Orthopaedics, Summit Orthopedics, Minnesota Eye Consultants, Twin Cities Orthopedics, Central Pediatrics and M-Health Pediatrics Specialty Clinic.

Courtyard by Marriott is the newest hotel to open. Retail projects include Costco, Portillo’s, Whole Foods, Sierra Trading Post, and Duluth Trading Company. Additional projects under construction include CityPlace Medical (Minnesota Gastroenterology), Fraser Clinic, Alamo Drafthouse, H & M, and Simply Self- Storage. In 2017 Woodbury approved the creation of 1,179 new residential lots, and issued permits for 646 new housing units, including a 305-unit apartment, Woodbury Flats. A 216-unit affordable senior apartment, the Legends of Woodbury, is currently under construction.

Finalists: City of Wayzata City of Ramsey City of Woodbury City of Edina City of Golden Valley

March April 2018

March April 2018

Minnesota Real Estate Journal

Hospitality Winner: Intercontinental, MSP Airport The InterContinental Minneapolis-St. Paul Airport is the first and only hotel at the nation’s 16th busiest airport and while it is an international brand, the design has a distinctly Minnesota feel. With 291 rooms—including nine suites—two restaurants, a penthouse-level observation bar, signature InterContinental Club Lounge, business center, world-class spa, and nearly 25,000 square-feet of convention and associated spaces, the InterContinental Minneapolis – St. Paul Airport aims to be an ultimate destination for both leisure and business guests. Guests arrive at the hotel either via the front entrance or a skyway connection to the airport with its own TSA checkpoint. As expected of a five-star hotel, guest rooms are luxurious with modern finishes.

Guests and travelers with longer lay-overs can relax in the hotel spa, grotto and thermal pool. Or visit one the hotel’s distinctive dining options, including an observation deck bar on the top floor that boosts the best views of the Twin Cities and the airport’s busy runways. From its undulating glass facade to its contextual, warm tones, the new InterContinental Minneapolis-St. Paul Airport hotel is a great amenity for the airport as well as interface between the Twin Cities and the rest of the world.

Finalists: Courtyard by Marriott Minneapolis West Courtyard by Marriott at CityPlace InterContinental MSP Airport Great Wolf Lodge Renaissance Minneapolis Hotel The Depot

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Minnesota Real Estate Journal

March April 2018

Executive of the Year Winner: Kelly Doran 2017 was an incredibly productive year for Doran Companies under the leadership of its top executive and owner, Kelly Doran.

Highlights include the following: • The sale of The Bridges and The Knoll—the two remaining student housing properties of the six his company built, owned and managed at the University of Minnesota. The value of the transaction was $93 million.

• The opening of The Moline, a 241-unit multifamily luxury housing development in historic downtown Hopkins was especially satisfying considering a recent Star Tribune analysis of trends in the development of multi-family apartments in the Twin Cities market, it was suggested that in 2018 developers of urban style luxury apartments are likely to move from building in the Minneapolis urban areas to suburban communities. In a bold, trend-setting move two years prior to that prediction Doran Companies was on the cusp of breaking ground for The Moline in Hopkins, the second of four major suburban projects being developed by Doran.

• The completion of a planned expansion to Colorado, where Doran Construction broke ground in 2017 for a Sherman development of a 254-unit multi-family project in Westminster, Colorado.

• Doran Construction’s remarkable record of breaking ground on six major multi-family construction projects, including two for Doran Companies’ own developments and projects for Alatus, Sherman, The Sela Group and Master Properties.

• The recognition of Doran Construction as the General Contractor of the Year by The Minnesota Construction Association and the Star Tribune’s naming Doran Companies as a Top Workplace Finalists: Alan Arthur, Aeon Jeff Callinan, JE Dunn Ryan Comer, Renovation Systems Kelly Doran, Doran Companies

Broker of the Year Winner: David Anderson David Anderson co-leads the Corporate Services team and provides representation and consultation to corporate and commercial real estate users, investors and owners to support their firms’ strategy and create value in their real estate positions. David’s practice includes corporate real estate services, tenant and buyer representation, development, acquisition and disposition services and strategic advisory services on a local and national level.

Finalists: Jill Rasmussen David Anderson Dan Gleason Chris Rohrer Mark Kolsrud

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March April 2018

Minnesota Real Estate Journal

Developer of the Year Winner: Aeon Affordable housing is disappearing quickly in the Twin Cities area. Homes that are considered naturally occurring affordable housing (NOAH) are being sold and upscaled, displacing the residents who can no longer afford to live there. This sometimes forces individuals and families to leave jobs, schools, churches and the communities they love to find an affordable home elsewhere. In 2017, Aeon had its two biggest acquisitions ever in its 31-year history. These purchases allowed us to add 11 new properties to our portfolio, but more importantly, these acquisitions preserved 1,190 affordable homes in our community. By purchasing these 11 properties, we were able to keep them affordable at 60 percent area median income (AMI) and prevent families and individuals from being displaced. In 2017, Aeon also completed a renovation and expansion of Balsam Hill Apartments & Townhomes. This building, located in Mound, was originally public housing serving primarily single adults and seniors. Through a unique partnership with the City of Mound, Aeon was able to purchase the building to ensure its long-term affordability. The addition of two-bedroom apartments and 10 new townhomes also diversified the community, making room for larger families. Lastly, Aeon closed sale on two acres of land in the City of Ramsey, where we are building a property called Greenway Terrace Apartments. This affordable apartment complex will be designated to particularly serve larger families with 54 two-, three- and four-bedroom apartment homes affordable to households earning 30-50% of area median income (AMI).

Finalists: Doran Companies Schafer Richardson Aeon BohLand Development Davis Companies

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Breaking Ground from page 23

recently completed. The project is owned by Harlem Irving Companies and Campus Acquisitions, LLC, and is designed by Tushie Montgomery Architects of Minneapolis. Acording to Jim Harmon, Director of Minnesota Operations, “the re-development of the historic Prospect Park neighborhood in Minneapolis has begun with the opening of The Link. New roads, public gardens, and community enhancements such as the Fresh Thyme Farmers Market will draw residents to this area. We at Stevens Construction Crop., feel fortunate to have been a part of this neighborhood revitalization and are excited for its future potential.”

Report: Davis was one of the nation’s top healthcare real estate developers last year Minneapolis-based healthcare real estate developer ranked seventh in project starts and eighth in total projects last year, says an new independent survey

Minnesota Real Estate Journal

from Revista and HREI Davis, a national healthcare real estate (HRE) development, property management, brokerage and investment firm, was one of the nation’s leading developers of medical office buildings (MOBs) and other outpatient facilities last year.

That’s according to the newly released Revista HRE Outpatient Development Report.

On the basis of total square footage, Davis ranked in the top 10 nationwide last year in both outpatient development projects started and total projects started or completed. The Minneapolis-based firm began or completed development of five projects totaling 246,226 square feet.

“Davis is pleased to be numbered among the top healthcare real estate developers in the United States after a great 2017, and to be acknowledged in this important survey,” says Mark A. Davis, Principal of Davis. “The Revista rankings are a testament to our constant dedication to providing excellent healthcare facilities answering a variety of consumer and health system needs.”

The second annual Revista Outpatient HRE Development Report, developed

by HRE research firm Revista in collaboration with Healthcare Real Estate Insights (HREI) magazine, is the sector’s most comprehensive, accurate source of data for the development of MOBs and other outpatient facilities.

Revista, in collaboration with HREI, developed a questionnaire that collected data on all outpatient HRE development projects started or completed in 2017 that exceeded $2.5 million in value and that included at least 5,000 square feet of new or renovated space. Data was gathered on the basis of 25 voluntary surveys completed by developers, as well data collected on another 125 companies – all of which was then independently verified by Revista. Overall, 34.2 million square feet of outpatient real estate was started or completed in 2017.

The Davis developments that were counted in the new survey include: HealthEast Clinic & Specialty Center, a 147,926 square foot MOB in Maplewood, Minn.; Monticello Dental Specialty Building,

March April 2018

a 10,300 square foot dental facility in Monticello, Minn.; CityPlace Medical, a 52,000-square foot MOB in Woodbury, Minn.; HealthEast Vadnais Heights, a 18,000 square foot MOB in Vadnais Heights, Minn.; and Wayzata Specialty Center, a 16,000 square foot MOB in Wayzata, Minn.

United Properties begins construction on Target Field Station in North Loop Mixed-use development to feature Minneapolis Fillmore Theater and Element by Westin hotel United Properties has started construction on Target Field Station, its fifth project in Minneapolis' North Loop neighborhood. The 150,000-sq.-ft. building will feature a Fillmore Theater and Element by Westin hotel. The project is expected to be completed fall 2019.

United Properties' mixed-use development will cap the company's commerBreaking Ground to next page

March April 2018

cial real estate development activities in the Target Field Station area, which includes the Ford Center, Be the Match headquarters and Caribou Coffee. The .74-acre site is adjacent to Target Field and a central light rail station.

The Opus Group® and Titan Development & Investments Announce Start of Construction for Mixed-Use Development in Rochester The Opus Group (Opus) and Titan Development & Investments (Titan) announced today the start of construction on a 154-unit mixed-use apartment and retail development in downtown Rochester.

“Located just steps away from Mayo Clinic’s main campus in downtown Rochester, this development marries convenience with high-quality amenities for local residents,” said Matt Rauenhorst, vice president, general manager, Opus Development Company, L.L.C. “Our combined Opus and Titan team will bring urban living to a new level in Rochester, and we’re thrilled to

Minnesota Real Estate Journal

be a part of the city’s and DMC’s vision for the area.”

This project is under the City of Rochester’s Destination Medical Center (DMC) initiative, a public-private partnership to position Rochester, Minnesota as the world’s premier destination for health and wellness. The DMC (www.dmc.mn) is the largest economic development initiative in Minnesota and one of the largest in the nation.

“The development will bring upscale finishes and an unmatched amenity package to downtown Rochester” said Sheila Thoma, Titan’s director of marketing and communications. “We are excited to be partnering with Opus, the City of Rochester, and DMC to provide the Rochester community a unique option for downtown living.”

The six-story building will include 9,000 square feet of ground-level retail space. The first level amenities will include a gallery entryway, a main entry lobby, tenant storage as well as a dog wash, bike storage and resident parking.

The second level will include a swimming pool, green roof space with seat-

ing, fire pit, club room and fitness center. Additionally, tenants have access to the sixth floor lounge, which is adjacent to the outdoor rooftop deck complete with a fire pit. The project will offer studios up to penthouse units and include furnished units. The mixed-use development is scheduled for completion in the summer of 2019.

Opus Development Company, L.L.C. and Titan are co-developing the project.

Opus Design Build, L.L.C. is the design-builder and Opus AE Group, L.L.C. is the interior designer, architect and structural engineer of record. Titan is providing the construction management.

ACKERBERG Tops Off MoZaic East ACKERBERG announced that on March 20th, they topped off MoZaic East, an eight-story, 198,000 square foot, Class A creative office and retail project located 2900 Fremont Avenue South in Minneapolis’ Uptown neighborhood. The project is expected to be complete during the fourth quarter of

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2018.

ACKERBERG currently has a 46,000 square foot lease with WeWork, and a 5,760 square foot lease with Alchemy365 at MoZaic East. WeWork is a shared workspace offering workspace, community, and services in more than 170 locations spread across 56 cities in 18 countries. WeWork currently has one other location in Minnesota at Capella Tower in downtown Minneapolis. Alchemy365 is a fitness studio that blends yoga, intense conditioning, and strength. Alchemy is close to closing a $1 million round of convertible debt to build its next two locations in Minneapolis and Denver, CEO Mike Jones told Minne Inno.

MoZaic East project partners include: ACKERBERG as developer; Opus AE Group, L.L.C. as Architect; The Opus Group as General Contractor; and, First National Bank of Omaha, MidCountry Bank and First Western Bank and Trust are providing financing.

MoZaic East will build upon the Midtown Greenway connection by Breaking Ground to page 36

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Breaking Ground from page 35

offering bike-centric amenities and north-facing rooftop patios. ACKERBERG is seeking LEED certification for the project. The building is also seeking WiredScore certification, bringing focus towards the technology infrastructure to ensure it is optimized for the connectivity needs of tomorrow’s office.

“Demand and interest for quality office in the Uptown market is extremely strong with, currently, little available space for larger users,” said ACKERBERG CEO, Stuart Ackerberg. “MoZaic West leased up very quickly and interest by tenants in this marketplace continues to grow. We are excited to bring more daytime population to the Uptown marketplace.”

Oppidan breaks ground at 46th and Hiawatha Oppidan Breaks Ground on MixedUse Development at 46th and Hiawatha Includes grocery store, retail and public plaza Minneapolis – (March

Minnesota Real Estate Journal

15, 2018) – Oppidan Investment Company, a national property development firm headquartered in Excelsior, Minn., broke ground today on a transitorientated, mixed-use development.

The development will include 148 market-rate apartments, a 45,000 SF grocery store, 3,000 SF of small-shop retail, and a large public plaza. Additionally, the development serves as the “pilot” phase of the MN hi-line, a pedestrian path and linear park that will eventually provide connectivity from Minnehaha Park all the way to the Midtown Greenway. This pilot project will be constructed on a section of former railroad right-of-way now owned by the City of Minneapolis. “This area of Minneapolis has experienced exciting growth with higher-density residential projects, due in part to its proximity to downtown, MSP Airport, the Blue Line light rail, bike trails and Minnehaha Regional Park,” said Drew Johnson/VP of development. “However, the neighborhood does not have a full-serve grocery store to complement this residential growth. When this proj-

March April 2018

ect opens, over 10,000 people will be within a 10-minute walk of this store.”

On hand at the ground-breaking ceremony today included Minneapolis Council Member Ward 12 Andrew Johnson, Hennepin County Commissioner Peter McLaughlin, Minnesota Hi Line Coalition Founder Cora Peterson, and Cub Foods President of Operations Chad Ferguson. “You couldn’t pick a better location,” said Andrew Johnson, Minneapolis Council Member – Ward 12. “It’s across the street from the busiest park in the state, on LRT and BRT lines with several prominent bike paths nearby, and a short walk to Minnehaha Creek and the Mississippi River.” The grocery should open in the spring of 2019 and the apartments will open early summer of 2019. The project’s general contractor is Anderson Companies and the architect is Pope.

Hillcrest Development LLLP and The Opus Group® Announce Start of Construction of First Building at Southeast Industrial Park Hillcrest Development LLLP (Hillcrest) and The Opus Group (Opus) announced today the start of construction on the first building at Southeast Industrial Park. North Star Sheets will occupy the 161,000-square-foot building in Cottage Grove, which is scheduled for completion in September 2018.

“We’re excited to be working with Hillcrest to kick off development at Southeast Industrial Park,” said Phil Cattanach, senior director, real estate development, Opus Development Company, L.L.C. “We’re pleased that this site, as well as Opus’ integrated delivery system, worked well with

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North Star Sheets’ vision for its expansion and new manufacturing facility.”

“The City of Cottage Grove’s involvement was instrumental in helping to secure North Star Sheets at Southeast Industrial Park,” said Scott Tankenoff, managing partner, Hillcrest Development. “Coupled with the expertise and professionalism of the Opus team, we are pleased to proceed ahead with the first phase of development at Southeast Industrial Park.”

North Star Sheets chose to pursue development at Southeast Industrial Park because the site is rail served; the company will use the building for manufacturing. Additionally, the Minnesota Department of Employment and Economic Development (DEED) certified the development as shovel-ready, allowing time consuming hurdles to be resolved well in advance. Located south of US Highway 61, the one-story building will have major freeway access.

This is the first phase in a multiphase, rail-served industrial development between Opus and Hillcrest. An additional 24 acres remain open on the site, which Hillcrest owns, allowing for 300,000-350,000 square feet of future development. Hillcrest has retained Eric Rossbach of Colliers International to market the site; all inquiries can be directed to Rossbach at 952.897.7872 or eric.rossbach@colliers.com.

Canadian Pacific provides rail service to the site, with public utilities and infrastructure provided to the site.

Opus Development Company, L.L.C. is the developer, Opus Design Build, L.L.C. is the design-builder and Opus AE Group, L.L.C. is the architect and structural engineer of record.

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March April 2018

SR Realty Trust Acquires General Pump Building in Mendota Heights SR Realty Trust, Inc. is pleased to announce today’s acquisition of a 100% leased single-tenant office warehouse property located at 1174 Northland Drive in Mendota Heights, MN. The 52,360-square foot building is home to General Pump, a world leader in plunger pump development since 1982. The highly functional facility was built on over three acres of land in 1994 and features 24-foot clear height, three dock doors, and two drive-ins.

SR Realty Trust partnered on the acquisition with five 1031 exchange buyers to purchase the property for $4.1 million.

Evan Richardson, Vice President Capital Markets, stated, “The General Pump acquisition is another example of SR Realty Trust’s ability to provide sim-

Minnesota Real Estate Journal

ple 1031 solutions for exchange buyers across the Upper Midwest.”

Timberland Partners Announces Purchase of Huntington at Sundance, Mulberry, Florida, 292 units Minneapolis based Timberland Partners is pleased to announce the acquisition of Huntington at Sundance, an apartment community located in Mulberry, Florida. Founded in 1992, the company now owns and manages 67 apartment communities totaling 13,068 apartment units in its portfolio spanning 13 states. This is the fifth property Timberland Partners now owns in the Florida market.

The 292-unit acquisition was funded from the Timberland Partners Investment Fund VI, LLC, and represents the fourth acquisition from fund six. Timberland Partners anticipates offering

additional investment opportunities as it continues to pursue a strategy of aggressive growth in the multi-family real estate market.

Timberland Partners Vice President of Real Estate Investments, Matt Fransen, said “We are bullish on the apartment fundamentals and strong job growth metrics occurring throughout central Florida. We look forward to implementing a business plan that will further improve and modernize the community.”

Huntington at Sundance was built in 1998, and consists of one, two and three bedroom floorplans located on 22 acres, hosting amenities such as an outdoor pool, fitness center and clubhouse. An extensive $3 million renovation plan includes a new resort-style outdoor kitchen, updated landscaping and new roofing, with units receiving granite countertops, subway tile kitchen backsplash, stainless steel appliances and 2”

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faux wood blinds.

The seller was represented by JBM Institutional Multifamily Advisors.

CBRE Capital Markets Completes Sale of 101,500 SF Class A Office in Edina for $14.45M CBRE Capital Markets arranged the sale of the Edinborough Corporate Center, a 101,568-square-foot Class A office building in Edina, Minnesota to Altus Properties for $14.45 million.

Ryan Watts, Sonja Dusil, Tom Holtz and Judd Welliver in CBRE’s Minneapolis office represented the seller, EverWest Real Estate Partners.

The seven-story Edinborough Corporate Center was built in 1986 as part of mixed-use development that includes Edina’s Edinborough Park, a one-acre indoor city park. Edinborough Corporate Center offers a best-of-class ameni-

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ty package including covered parking, on-site deli, and a state-of-the-art conference and training facility. A tenant, Especially for Children, operates a childcare center within the building – a highly-desired amenity for the building’s workforce.

“Office properties in Edina compete extremely well within the broader 494 submarket and offer a complete livework-play environment for occupiers,” said Mr. Watts, Senior Vice President.

“Investors jumped at the rare opportunity to acquire the Edinborough Corporate Center because of its prime location and track record of success.”

The building was 91 percent occupied at the time of sale and has historically high occupancy.

The office building is also connected to the 135-room Marriott Residence Inn hotel, renovated in 2012, and Brookdale Edina, a 203-unit luxury senior apartment complex.

CBRE Capital Markets Closes Sale of 914,698 SF Industrial Tech Portfolio in the Twin Cities CBRE Capital Markets has arranged the sale of a Twin Cities 12-property industrial tech portfolio totaling 914,698 square feet to a joint venture between Artemis Real Estate Partners and Eagle Ridge Partners.

Judd Welliver, Ryan Watts, Sonja Dusil, and Tom Holtz in CBRE’s Minneapolis office represented the seller, a private REIT. The sale closed March 29, 2018.

The portfolio includes well-located suburban office warehouse properties in Woodbury, Oakdale, Plymouth, Maple Grove, Minnetonka and Eden Prairie with a high-degree of office finish. The portfolio was more than 87 percent occupied at the time of sale.

Tenants in the portfolio include a mix of high-tech services, manufacturing, bio-technology, media production and other companies in the growing tech industry.

The full list of properties in the portfolio includes: • Hudson Road Technology Center, 7805 Hudson Rd., Woodbury • Oakdale Interstate Center, 550-590 Hale Ave. N., Oakdale • Northwest Business Campus I, 2905 Northwest Blvd., Plymouth • Northwest Business Campus II, 2800 Campus Dr., Plymouth

Minnesota Real Estate Journal

• Northwest Business Campus III, 2955 Xenium Ln. N., Plymouth, • 169 Commerce Center, 9600 54th Ave. N., Plymouth • Nathan Lane Technology Center, 4600 Nathan Ln., Plymouth • Meridian Business Center, 7550 Meridian Circle N., Maple Grove • Rowland Pond Center, 5600 - 5610 Rowland Rd., Minnetonka • Lake Smetana Tech Center, 76607716 Golden Triangle Dr., Eden Prairie • Highway 212 Corporate Center, 7400 Flying Cloud Dr., Eden Prairie • Westwood IV, 6321 Bury Dr., Eden Prairie

Dougherty Mortgage Closes Several Transaction in March and April $19.8 million Fannie Mae loan for The Pointe at Bentonville - Phase I The Minneapolis office of Dougherty Mortgage LLC closed a $19.8 million Fannie Mae loan for the refinance of The Pointe at Bentonville - Phase I, a 170-unit market rate multifamily housing property located in Bentonville, Arkansas. The 10-year loan features a 30-year amortization schedule and was arranged for borrower The Pointe at Bentonville, LLC.

Fannie Mae loan for Towne Oaks Townhomes Dougherty Mortgage LLC, a full service national mortgage banking firm, recently closed a Fannie Mae loan for the acquisition financing of Towne Oaks Townhomes, a 78-unit market rate multifamily housing property located in Irving, Texas. The 12year loan, arranged through a partnership with SPI Advisory Broker Group and Dougherty’s Minneapolis and Vienna, Virginia offices, features a 30year amortization schedule.

$7.3 million Fannie Mae loan for Green Twig Villas The Minneapolis office of Dougherty Mortgage LLC closed a $7.3 million Fannie Mae loan for the refinance of Green Twig Villas, a 62-unit multifamily affordable housing property located in Oak Park Heights, Minnesota. The 15-year loan features a 35-year amortization schedule and utilized 4% Lowincome Housing Tax Credits.

March April 2018

Fannie Mae loan for The Brix

Fannie Mae loan for The Luther

Dougherty Mortgage LLC, a full service national mortgage banking firm, recently closed a Fannie Mae loan for the refinancing of The Brix, a 53-unit market rate multifamily apartment property located in Dallas, Texas.

The 12-year loan, arranged through a partnership with Old Capital Lending and Dougherty’s Minneapolis and Vienna, Virginia offices, features a 30year amortization schedule.

The North Carolina office of Dougherty Mortgage LLC closed a Fannie Mae loan for the refinancing of The Luther, a historic rehabilitated 15unit market rate multifamily apartment property located in Baltimore, Maryland. The 12-year loan, arranged through a relationship with Birchwood Capital Partners, features a 30-year amortization schedule and was arranged for borrower 1728 Eastern Avenue Apartments, LLC.

$22.7 million HUD loan for Seven Palms Apartments The Minneapolis office of Dougherty Mortgage LLC closed a $22.7 million HUD 223(f) loan for the acquisition and rehabilitation of Seven Palms Apartments, a 336-unit affordable housing property located in Punta Gorda, Florida. The property offers one-, two-, and three-bedroom units with patio/balcony, dishwasher, disposal, in-unit washers and dryers, central AC, carpet/drapes/blinds, ceiling fans, and walk-in closets. Community amenities including gated entrance, swimming pool, spa/hot tub, tennis court, playground, clubhouse, business center, picnic area, car care center, storage and fitness room.

In 2002, the Project was developed with Low-Income Housing Tax Credits (“LIHTC”) and tax-exempt bonds and remains restricted to individuals and families earning less than 60% of Area Median Income (“AMI”). In addition, there are 51 units that are restricted to individuals and families earning 33% of AMI. These restrictions will be extended for a 15-year Compliance Period and a 15-year Extended Use Period as part of this transaction.

The Borrower is performing $7,909,489 ($23,540 per unit) in moderate renovation work to the property.

This includes unit accessibility upgrades, window replacement, new lighting and signage, high-efficiency fixtures and appliances, a new key fob system, and amenity improvements.

This Project involves the issuance of tax-exempt bonds and 4% Low Income Housing Tax Credits. The 35-year loan features a 35-year amortization schedule and was arranged for borrower Punta Gorda Leased Housing Associates II, LLLP.

Fannie Mae loan for Tinsley Place Dougherty Mortgage LLC, a full service national mortgage banking firm, recently closed a Fannie Mae loan for the acquisition financing of Tinsley Place, a 214-unit market rate multifamily apartment property located in Waco, Texas. The 12-year loan, arranged through a partnership with Old Capital Lending and Dougherty’s Minneapolis and Vienna, Virginia offices, features a 30-year amortization schedule.

Fannie Mae loan for Colonial Arms Dougherty Mortgage LLC, a full service national mortgage banking firm, recently closed a Fannie Mae loan for the acquisition financing of Colonial Arms, a 123-unit market rate multifamily apartment property located in Waco, Texas. The 12-year loan, arranged through a partnership with Old Capital Lending and Dougherty’s Minneapolis and Vienna, Virginia offices for borrower DCP 601 Brown Trail, LLC, features a 30-year amortization schedule and utilized Green Rewards.

Fannie Mae loan for Lofts at Silver The Atlanta office of Dougherty Mortgage LLC closed a $3.1 million Fannie Mae loan for the refinance of Lofts at Silver, a 23-unit market rate multifamily apartment property located in Macon, Georgia. The 12-year loan features a 30-year amortization schedule and was arranged for borrower 450 3rd Street, LLC.

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