MREJ May 2018 by REjournals

VOLUME 34, NUMBER 5

May 2018

After Years of Planning, Area around Ridgedale Center Being Redeveloped into Mixed-Use Community The city of Minnetonka wants to increase density, improve traffic flow, make area more walkable and add green space, trails

By Liz Wolf

or years, the city of Minnetonka has envisioned plans to transform the Ridgedale Center area into a higher-density, more walkable, mixed-use community that would become more of a gathering spot, rather than just a place to shop. Similar to other suburbs, Minnetonka is looking to make the city more pedestrian-friendly and attractive

to both empty-nesters and young professionals. Now that vision is starting to become a reality. Redevelopment proposals for sites around the mall are coming in, and Ridgedale Center itself has made major improvements. Built in the 1970s, Ridgedale has completed significant updates, including the redesign of the Macy's store, the addition of Nordstrom and a 50,000-square-foot expansion. Plus, additional development by mall owner GGP is underway.

The city’s vision for the area In 2012, the city released “Ridgedale: A Vision for 2035,” which essentially looks at how the Ridgedale area could look over the next two decades. In 2017, it released the “Ridgedale Area Public Realm Guidelines,” which focus on transforming the shopping center into a mixed-use community and providing developers with design inspiration and guidance. The master plan calls for adding 800 new housing units, 180,000 square feet of office/medical office Ridgedale to page 10

Ryan Companies Announces Leadership Transition

yan Companies US, Inc. announced today that President and Chief Executive Officer Pat Ryan will step aside from his current duties effective June 1st to become chairman of the company’s board of directors. Brian Murray will assume the CEO position. Along with owners Jeff Smith and Mike McElroy, Murray has helped lead Ryan’s day-to-day operations for the last five years. As part of the transition, Smith will take on the role of President and McElroy will be the company’s

Chief Investment Officer. Tim Gray, who currently chairs the company’s board of directors, will assume the title of Chairman Emeritus. “I’ve been blessed to work alongside phenomenal people for 35 years,” Ryan said. “I can’t begin to express my appreciation for that privilege but I can say that I’m so pleased to be handing off executive responsibilities to a tremendous team of leaders. Brian, Jeff and Mike are smart, capable, experienced and hardworking. And most importantly,

they understand and live our culture which, in the final analysis, is what differentiates us from our competitors.” “It’s a tremendous honor to take on an expanded leadership role at Ryan and to follow in the footsteps of a great leader like Pat,” said Murray. “This is an important time for our company as we look ahead to future opportunities. In a world where the pace of change is accelerating, we need to innovate Ryan Companies to page 14

May 2018

Minnesota Real Estate Journal

Featured Stories

MAY 2018 • VOLUME 34, NUMBER 5

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

RIDGEDALE CENTER BEING REDEVELOPED INTO MIXED-USE COMMUNITY RYAN COMPANIES ANNOUNCES LEADERSHIP TRANSITION

MORTENSON SELECTED TO LEAD MAJOR SNELLING-MIDWAY REDEVELOPMENT PROJECT IN ST. PAUL

RYAN COMPANIES SHARES VISION FOR O’GARA’S MIXED USE PROJECT

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

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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

Katie P. Pivec Joins Moss & Barnett Moss & Barnett is pleased to announce that Katie P. Pivec has joined the firm’s real estateand infrastructure teams. Katie focuses her practice primarily on zoning, municipal law, and commercial leasing. She is a member of a team serving one of the nation’s largest wireless communications companies and, in that capacity, counsels client stake-

May 2018

holders on a myriad of issues. Prior to joining Moss & Barnett, Katie practiced for several years as a transactional attorney, focusing on the needs of closely held business clients. She also worked in-house for a large technology company as a research attorney and for a commercial real estate management group. Katie received her J.D., magna cum laude, from the University of Min-

nesota Law School and her B.A., cum laude, from Newcomb College, Tulane University. “The depth and breadth of Katie’s experience and expertise will greatly enhance our already strong practice areas, and we are extremely pleased to have her join us,” said Thomas J. Shroyer, Moss & Barnett’s Chief Executive Officer.

Consulting Editor Dr. Tom Musil tamusil@stthomas.edu Conference Manager | Art Director | Graphic Designer | CE Specialist Alan Davis alan.davis@resummits.com

Five Questions with Chris Schad, Destination Medical Center’s Director of Business Development – Discovery Square

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Chris Schad is a driving force behind Destination Medical Center’s Discovery Square. He directs business and economic development for the healthcare technology hub that is the cornerstone of the Destination Medical Center (DMC) initiative. He works to recruit healthcare companies to Rochester and attract investment capital to the region. He is also passionate about growing the entrepreneurial ecosystem in Rochester, a key to our community’s longterm success. We spent some time with Chris to learn more about his priorities for Discovery Square and why he thinks Rochester is a hidden gem. MREJ: What path led you to your current role with the DMC Economic Development Agency? Schad: I have worked in healthcare technology most of my career – primarily in the life sciences space. I started at the bench in genetics labs, moved into laboratory leadership roles, and then into a variety of administrative roles. Along the way, I developed some technology that was licensed out by Mayo Clinic, picked up a business degree, and got some experience in the business development world. When the first announcements about Discovery Square rolled out in 2016, the blend of healthcare-related science and innovation with business and economic development was intriguing to me. I was fortunate to land this role in early 2017. MREJ: What components of the DMC initiative do you focus on in your role? Schad: The DMC office is relatively small, with a lot of work to be done in a wide variety of sectors, and we are all involved in nearly every initiative in some way. My main focus is on Discovery Square. We have established a sevenpoint strategy for Discovery Square that guides our work. Right now, most of the work within that framework focuses on attracting businesses to the sub-district, workforce development for those businesses, and finding ways to grow the startup culture and supporting ecosystem for entrepreneurs. MREJ: What excites you most about the future of DMC? Schad: There is a lot to be excited about. The energy behind the changes that are happening is invigorating, and that energy is attractive to others outside of Rochester. We

have an opportunity to position Rochester and the region for the coming decades. For me and the work I do, I am most excited about the new companies that are – and will be – coming into Rochester as part of Discovery Square. Those companies will diversify our economy, bringing with them new career opportunities for all of us already living here. Some of the businesses will be small, some very large, some will have international roots, and each will bring their own unique culture into Rochester. That entrepreneurial startup culture will be the key to our long-term success in Discovery Square. MREJ: Why is the Destination Medical Center initiative so important to the future of Rochester? Schad: We already know Rochester and the surrounding region are going to grow. With public support from the DMC legislation, we are able to take an intentional approach to that growth, to get out ahead of the curve to anticipate what will be needed and to attract the workforce we need for that growth in our region. MREJ: What advice would you give to someone thinking about building a life, starting a career, or raising a family in America’s City for Health? Schad: Come check us out. Do your homework and see what is happening. And then jump in and join us for the journey ahead.

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Minnesota Real Estate Journal

May 2018

Mortenson Selected to Lead Major SnellingMidway Redevelopment Project in St. Paul

D Management LLC, as representative of RK Midway LLC, today announced the selection of Mortenson to lead the redevelopment of its property located at the intersection of Snelling and University Avenues in the historic Midway area of St. Paul. Mortenson will lead the redevelopment of the site for office, retail, entertainment, hospitality and residential use. The City of St. Paul has approved a master plan for the nearly 25-acre siteâ&#x20AC;&#x201D;an area equal to approximately eight downtown city blocks. The Midway is part of an established, diverse and vibrant community within St. Paul. The Snelling-Midway site is one of the premier transit-oriented development opportunities in the region. The site is ideally situated between downtown St. Paul and Minneapolis and is within 20-minutes of MSP International Airport. It is adjacent to the LRT Metro Green Line and the new Bus Rapid Transit Service, and abuts I-94, one of the most heavily-trafficked freeways in the metro. The area is surrounded by significant commercial and residential activity in addition to nine col-

leges and universities within a 3.5 mile radius of the site. Redevelopment has already begun with construction of the internationally-

recognized Allianz Field, the new $250 million home for the professional soccer club Minnesota United FC. The stadium is more than 50 percent complete and is

scheduled to open in the spring of 2019. Allianz Field, like the Battery next to Midway to page 14

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Minnesota Real Estate Journal

May 2018

Ryan Companies Shares Vision for O’Gara’s Mixed Use Project

yan Companies revealed, Monday night, the vision for the revitalization of Saint Paul’s Iconic Union Park Neighborhood establishment O’Gara’s. The project encompasses the existing O’Gara’s restaurant and parking lot, as well as three single family homes owned by the O’Gara family. The proposed design, unveiled at the Union Park District Council meeting, includes 163 apartment units, 205 parking stalls, an integrated co-working space, apartment amenity spaces, and 4,116 square feet of retail space for O’Gara’s. “O’Gara’s has been a fixture on the Snelling and Selby corner for over 70 years and we are excited to design and develop a project that will continue to be a valued landmark in the community for the next generation,” said Tony Barranco, Senior Vice President of Development, Ryan Companies US, Inc. The plan includes the redesign of O’Gara’s restaurant that retains the many iconic interior décor elements and incorporation of them into the new space. The exterior design will carry through the rich street level masonry character of the original building that honors the prominent corner and retains

the beautiful, pedestrian friendly environment. Dan O’Gara, third generation owner of the site added, “This is a perfect project for the next chapter of O’Gara’s. While we will retain lots of little touches that will remind of our past, our smaller footprint and outdoor patio area will reshape our business, making it feel like a great neighborhood pub and restaurant.”

The community benefits from the project will include the voluntary inclusion of three affordable housing units, workforce opportunities and diversion of landfill waste through Better Futures MN, adding storm water management improvements to a site that currently has no active management, activating the streetscape including the alley between O’Gara’s and Neighborhood Café and adding plantings between the road and

sidewalk to create a safer, more visually interesting experience, car sharing and more. Ryan has submitted plans to the City of Saint Paul today and is expected to attend land use meetings throughout the Summer with the goal of commencing construction this Fall.

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Minnesota Real Estate Journal

May 2018

Ridgedale From page 1

space, 250 hotel rooms, a conference center and new restaurants. Each new project would add public amenities and pedestrian connections to link building entrances, parking, sidewalks, transit stops and other destinations. Plans call for improving streets and sidewalks to encourage walking and bicycle use, enhancing transit service, and over time, replacing surface parking with structured parking. The guidelines also focus on enhancing the area’s natural features and encouraging environmentally friendly places. It outlines improvements including rebuilding Ridgedale Drive into a tree-lined parkway – which is scheduled to begin in 2019 -- and improving the area’s other main streets – Plymouth Road, Wayzata Boulevard and Cartway Lane -- to help manage traffic flow. The city is investing in major road infrastructure. “The city has a vision to redo the 1970s mall pattern,” says Julie Wischnack, Minnetonka community development director. “It doesn’t happen overnight. The road projects are intended to start creating a new pattern that has

trails and sidewalks, vegetation, storm water enhancements -- all those things that are so missing from that area.” Redevelopment of Highland Bank property is catalyst One significant project getting credit

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for kicking off the city’s vision is the redevelopment of the Highland Bank property into a $35 million, mixed-use apartment building called The Residences at 1700. St. Louis Park-based Bader Development and St. Paul-based Paster Proper-

ties partnered to redevelop the property at 1700 and 1730 Plymouth Road, directly across from Ridgedale Center. The three-story bank building, which was owned by Paster, was demolished to Ridgedale to next page

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make way for the six-story, 115-unit mixed-use apartment/retail complex. “Paster is a retailer developer and we’re a multifamily developer, and we thought we could both put our expertise to good use and create this urban-style development,” says Robb Bader, president of Bader Development. “We noticed this [type of development] happening certainly in St. Louis Park at West End and in Edina at Southdale, and it really wasn’t really happening around Ridgedale,” Bader says. “However, Ridgedale had a lot of investment poured into it and continues to as a mall. Nordstrom was a driver and clearly it worked, because there are many other retailers coming. You see that, and you see the demographics of the area and you really put two and two together. The multifamily around there before ours was 20-plus years old.” Bader says this type of higher-density, urban-style project is what the city envisioned when they started talking a “long ways back.” “Somebody’s got to kick it off,” Bader adds. “We felt the demographics are strong enough and the demand was strong enough that we were willing to make that type of investment and be the first one in.” “That project probably started this interest in what’s going on at

Minnesota Real Estate Journal

Ridgedale,” Wischnack says. “That project was a pretty big investment. Once people see that happening, there’s continued interest and synergy among

other projects. “ The Residences at 1700’s luxury apartments and the 15,800 square feet of ground-floor retail – called The Shoppes

Page 11

at 1700 – opened in 2017. The retail space includes a new Highland Bank, TRidgedale to next page

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Minnesota Real Estate Journal

May 2018

Ridgedale from page 11

Mobile, Caribou Coffee/Einstein Bros. Bagels and Craft Burger. Bader says the apartments are between 96 and 98 percent leased, which is “exactly where you want to be.” Amenities include heated underground parking, an outdoor pool/sundeck, lounge areas, a yoga studio, clubroom and fitness center. In terms of unit size, Bader says they’re a little bigger than traditional urban apartments currently being developed. “We deliberately did that recognizing that a big chunk of our demographics would be empty-nesters living in that area and looking for a different lifestyle; maybe leaving a home and wanted something a little bigger,” he says. High-profile TCF Bank site is redeveloped Across the street, Eden Prairie-based Solomon Real Estate Group redeveloped the TCF Bank property, located at the main entrance into Ridgedale Center, into the Ridgedale Corner Shoppes. The project includes a new 2,400square-foot TFC Bank branch attached to about 7,800 square feet of new retail space leased to Starbucks, Wedding Day and Sprint. TCF owns the bank branch

Photo by Spacecrafting

while Solomon owns and operates the retail space. “We had gone through a whole bunch of design configurations because the city considers it the gateway into the Ridgedale mall area,” says Solomon

Real Estate partner Steve Johnson. “RSP Architects designed this building, which is a little different than traditional retail buildings because of its much more high-profile look.”

The building design is contemporary with a translucent glass tower and brick accents. Johnson says lighting accents will allow the building to be very prominent in the evening hours. Ridgedale to next page

May 2018

Minnesota Real Estate Journal

“We did lots of work with them to keep this vibe that we’re trying to create,” Wischnack says. “There was a lot of back and forth about design. They stuck it out and were able to make that corner really look like it should. It was an old colonial, 1970s- branch, and they have new branding. We were able to get a really good project in the end.”

space for a full-service restaurant, says Joan Suko, senior general manager at Ridgedale Center/GGP. “It’s just kind of been underutilized,” Suko says of that section of the surface lot. “Cities are excited about adding some densification where they can. It will be an additional attraction for us for sure.”

Ridgedale Center building restaurants, entertainment in parking lot Ridgedale’s owners GGP have their own development project underway. GGP is creating restaurant/entertainment pads – including outdoor patios and landscaping -- in the northwest corner of the mall’s parking lot. This is a growing trend in which malls are turning underused portions of their surface parking lots into high-density uses like restaurants, hotels and apartments. Southdale Center in Edina, for example, has high-end apartments and a hotel in part of its parking lot. GGP will have a new building under construction soon for iFLY, an indoor skydiving venue. It will be iFLY’s first Minnesota location and is scheduled to open in November. Xfinity Store by Comcast will open a location in late summer/early fall. Café Zupas will open this summer, and plans call for another fast-casual restaurant and there’s also

What else is happening at Ridgedale Center? “We’ve got a lot going on,” Suko adds. New beauty concept store Riley Rose opened its first Twin Cities location in March. The Cheesecake Factory opened last October, and Old Navy will open on the lower level center court in late summer. The mall also has a new 6,000-square-foot indoor kids’ play area. Sears is an anchor at Ridgedale, however, the giant retailer announced in April that it’s closing its Maplewood Mall store, leaving just four stores in the Twin Cities. The Ridgedale location will likely be redeveloped in the relatively near future. GGP owns the Sears building. “Obviously, down the road we’re looking for some development opportunity,” Suko says. “That whole side of the property has a lot of potential, and certainly quite a few scenarios that developers are look-

ing at down the road.” She says potential redevelopment could include everything from a food hall and entertainment to residential and other uses. Housing proposals on the drawing board Dallas-based developer Trammell Crow Co. is proposing a six-story, 168unit senior apartment building on another underutilized Ridgedale parking lot that would also include a public park. The site is in the southwest corner of the mall’s parking lot and is owned by J.C Penney. Trammell Crow’s project -- called the Ridgedale Active Adult Apartments -would offer luxury senior living for the 55-plus demographic. Minneapolisbased ESG Architects is the project architect, and plans call for amenities like an outdoor terrace with a pool and hot tub, a fitness center and community room. The proposal goes before the Minnetonka City Council in early June. Ridgedale Executive Apartments proposed Across the street to the south of Trammell Crow’s site, Minnetonka developer Rotenberg Cos. is proposing an upscale, 77-unit apartment project on the site where Redstone Grill previously was

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located, before relocating in Ridgedale Center. The vacant restaurant building, owned by Rotenberg Cos., would be razed and a new, four-story luxury apartment building called the Ridgedale Executive Apartments would be constructed. The project would include a mix of one- and two-bedroom units. Amenities would include fitness facilities (including yoga, Pilates and spin studios), a community room, an outdoor patio/pool area, a sports simulator and putting green. Also, a 24-hour onsite concierge would be available. The proposal says the units are designed to attract both empty-nesters and young professionals. The proposal was scheduled to go before the city’s planning commission in late May.

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Ryan From page 1

and change while maintaining our strong culture. We have a very strong, very capable executive leadership team, a strong management group and exceptionally talented team members across the business. I’m proud of our accomplishments, and I’m excited about what’s ahead.” Today’s announcement is part of a succession plan carefully developed over several years with the leadership of Ryan’s board of directors. Ryan said he will remain involved in the company with a focus on helping in capital markets and real estate development and spending more time with key customers. “I warned my colleagues that they can expect to see my face around the office for a long time to come,” Ryan noted, “but I’m also planning to spend more time with my family.” This transition will mark the first time in Ryan’s 80-year history that non-family members will lead the company. Murray joined the company in 2009, and is currently the chief

Minnesota Real Estate Journal

operating officer and chief financial officer leading Ryan’s construction operations and shared services functions. Smith has been with the company over 30 years and is currently the National President overseeing its 15 regional offices and leading client development efforts. McElroy is currently President of Real Estate Investments, leading real estate management and capital markets groups and has been with the company nearly 20 years. Murray is a current board member of PrairieCare Child & Family Fund and a former board member of the Catholic Community Foundation, the Saint Paul and Saint John Vianney College Seminaries, and Twin Cities Cristo Rey Jesuit High School. In addition, Murray connects with other industry thought leaders through his participation and membership in the Construction Industry Roundtable.

Midway from page 6

SunTrust Bank Stadium in Atlanta and the land adjacent to Chelsea FC’s new stadium in London, will be a catalyst for new demand for a variety of commercial and residential interests. The iconic new stadium will draw hundreds of thousands of fans to the area each year, creating exposure to one of St. Paul’s best intersections and providing new opportunities for hoteliers, office users, retailers, entertainers, residential operators and more. Richard Birdoff, the principal at RD Management and owner of the property for over 25 years, noted that he has long wanted to redevelop the site and the construction of the iconic, architecturally-significant Allianz Field provided reason to move forward. “Great future developments will be linked to transportation-supported locations that foster accessibility, higher densities, and interesting amenities for businesses, residents and visitors,” he said. “The Midway is centrally located in a dynamic and growing community that offers a great foundation for future enhancements. We are pleased to be part of this exciting redevelopment effort in such a great community, and are par-

May 2018

ticularly excited that Mortenson is leading the efforts.” “Urban redevelopment opportunities of this scale are rare. Rarer is the case that a redevelopment is kickstarted by a $250 million professional sports stadium. In these exceptional situations, our development experience at the intersection of sports and entertainment tells us that powerful new opportunities are in store for the Snelling-Midway area,” said Jeremy Jacobs, director of real estate development at Mortenson. “We look forward to partnering with an incredible team, the City of St. Paul, RD Management and the local community to continue to transform this important piece of the St. Paul fabric.” S9 Architecture, a national architecture firm based in New York City that has designed large-scale mixeduse projects across North America, is the lead architect for the partnership. “We are thrilled to collaborate with such visionary partners as Mortenson and RD Management on this major redevelopment, and anticipate creating a distinctive and unique design that will support and inspire the St. Paul community,” said John Clifford, co-founding principal of S9 Architecture.

May 2018

MARCUS & MILLICHAP ARRANGES THE SALE OF A 2500 COLFAX AVENUE SOUTH; A 12-UNIT APARTMENT BUILDING IN UPTOWN NEIGHBORHOOD OF MINNEAPOLIS, MN Marcus & Millichap (NYSE: MMI), a leading commercial real estate investment services firm with offices throughout the United States and Canada, today announced the sale of Colfax Avenue, a 12-unit apartment property located in Minneapolis, Minnesota, according to Jon M. Ruzicka, regional manager of the firm’s Minneapolis office. The asset sold for $1,442,000. Mox Gunderson, Dan Linnell, Josh Talberg, and Abe Roberts (GLT Partners), investment specialists in Marcus & Millichap’s Minneapolis office, had the exclusive listing to market the prop-

Minnesota Real Estate Journal

erty on behalf of the seller, a private investor and secured the buyer, also a private investor. Speaking with Mr. Roberts, “The property garnered tremendous interest from the investment community. Ultimately, we toured the property over 30 times and received multiple offers. Even though we are in an increasing interest rate environment, values have remained strong, which lead to a sale price that exceeded our list price.” 2500 Colfax Avenue South, a 12-unit apartment complex located in the Uptown neighborhood of Minneapolis, was built in 1967 and consists of nine one-bedroom/one-bath and three studio apartments. Additionally, the property has 12 off-street parking spaces.

MARCUS & MILLICHAP ARRANGES THE SALE OF A

68-ROOM HOSPITALITY PROPERTY Marcus & Millichap (NYSE: MMI), a leading commercial real estate investment services firm with offices throughout the United States and Canada, today announced the sale of Days Inn Hinckley, a 68-room hospitality property located in Hinckley, MN, according to Jon M. Ruzicka, regional manager of the firm’s Minneapolis office. The asset sold for $1,730,000. Jon Ruzicka, First Vice President in Marcus & Millichap’s Minneapolis office, had the exclusive listing to market the property on behalf of the seller, a limited liability company. The buyer, a limited liability company, was secured and represented by Jon Ruzicka Days Inn Hinckley is located at 104 Grindstone Court in Hinckley, MN. The property boasts prime location off of

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Interstate 35 midway between Duluth and Minneapolis.

MARCUS & MILLICHAP ARRANGES THE SALE OF PRISCILLA STREET VILLAS; AN 11-UNIT APARTMENT BUILDING IN ST. PAUL, MN Marcus & Millichap (NYSE: MMI), a leading commercial real estate investment services firm with offices throughout the United States and Canada, today announced the sale of Priscilla Street Villas, an 11-unit apartment property located in Saint Paul, Minnesota, according to Jon M. Ruzicka, regional manager of the firm’s Minneapolis office. The asset sold for $1,382,500. Mox Gunderson, Dan Linnell, Josh Talberg, and Evan Miller (GLT Partners), investment specialists in Marcus

Page 16

& Millichap’s Minneapolis office, had the exclusive listing to market the property on behalf of the seller, a private investor and secured the buyer, a private investor. Speaking with Mr. Miller “Coupled with the building’s charm in architectural design and substantial economic drivers in the immediate sub-market, this offering drew over a dozen property tours, ultimately accepting an offer above the list price.” Priscilla Street Villas is located at 2333 Priscilla Street in Saint Paul, Minnesota and has 11 twobedroom/one-bath apartment homes.

Pair of Industrial Flex Buildings in Eden Prairie, MN Sold to Local Investor for $11.075M CBRE Capital Markets recently represented ownership in the sale of City West Business Center North and South, a pair of industrial flex buildings totaling 172,904 square feet, to Finke Associates, Inc. for $11.075 million.

Minnesota Real Estate Journal

Ryan Watts, Sonja Dusil, Judd Welliver and Tom Holtz in CBRE’s Minneapolis office represented the seller, Provident Real Estate Ventures LLC. The properties were constructed in 1984 and provide 67 percent office finish with 12’ clear height. Tenants at City West Business Center include Third Wave, InstyMeds, Augustine Biomedical and HRST, Inc.

TRANSWESTERN TAPPED TO LEASE 203,000 SF OF HISTORIC NORTH LOOP OFFICE AND RETAIL SPACE Transwestern today announces it has been retained by GRE Colonial Warehouse LLC and The Excelsior Group to lease Colonial Warehouse, a 203,000square-foot, creative class office and retail building in the North Loop neighborhood of Minneapolis, Minnesota. Transwestern’s Jim Montez, Teresa Borgen, and Nick Sveen are providing leasing services. “The Colonial Warehouse ownership

and management teams are excited to bring dynamic, contemporary amenities and programming to one of the North Loop’s most iconic buildings,” said Chris Culp, CEO of The Excelsior Group. “Our fitness center, tenant lounge, and tenant events are great additions to an already fantastic property.” Renovated in 2018, the building added unique amenities including a tenant lounge, conferencing space, fitness center, bike storage and locker rooms. Colonial Warehouse’s proximity to top dining choices, residential options, entertainment, high-end retailers, and major roadways make the building a prominent creative office choice for many tenants in the highly desirable North Loop. Prominent North Loop retailers MartinPatrick3, Moose & Sadie’s, and Grethen House are among the building’s distinguished tenants, along with many creative and technology firms, including Space150. The property currently has approximately 50,000 square feet available for lease.

May 2018

“We are excited to work with ownership to elevate one of the North Loop originals to its proper position in the marketplace,” said Montez. “Colonial Warehouse offers tenants a work environment filled with character and history, as well as all the technology and amenities required by today’s workforce.” Colonial Warehouse has been a North Loop fixture since 1885, originally constructed for the Minneapolis Street Railroad Company. The building has been listed on the National Register of Historic Places since 1989, architecturally defined by its series of two-story arched window bays.

CBRE Capital Markets Closes Sale of 163,000 SF Industrial Property in Maple Grove, MN2 for $12.35M CBRE Capital Markets recently represented ownership in the sale of the Five Star Commerce Center, a 163,012square-foot portfolio located 15 miles northwest of Minneapolis in Maple

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Grove, Minnesota. Sterling Office and Industrial Properties LLC, a North Dakota-based REIT, acquired the portfolio for $12.35 million in a sale that closed May 24, 2018. Judd Welliver, Ryan Watts, Sonja Dusil and Tom Holtz represented the seller, Interstate Partners. The Five Star Commerce Center consists of three institutional-quality industrial properties located just off Highway 610 in Maple Grove, one of the Twin Cities’ fastest growing industrial markets. The buildings, at 9464 Hemlock Lane and 11701-11751 95th Avenue N., were constructed in 1999. At the time of sale, the portfolio was 100 percent occupied. Major tenants include Next Day Automation, the Dance Complex dance studio, TruGreen lawn services and Brush Masters, Inc.

CBRE Capital Markets Arranges Sale of SingleTenant 105,000 SF Portfolio in Apple Valley for $9.15M CBRE Capital Markets recently closed the sale of a 105,053-square-foot portfolio, currently fully occupied by Questar Assessments, Inc., in Apple Valley to Dakota REIT for $9.15 million. The institutional quality portfolio, known as the Apple Valley Business Center, includes a 48,733-square-foot single-story office building at 5550 West Upper 147th Street and an adjacent 56,320-square-foot low-finish distribution space at 14720 Energy Way. Both properties are 100 percent occupied on a long-term lease by Questar, a K-12 educational assessment provider. Questar has occupied both buildings as its corporate office and distribution facility since 2006. Judd Welliver, Ryan Watts, Sonja Dusil and Tom Holtz represented the seller, the Excelsior Group LLC. The sale closed May 15, 2018. “Long-term net leased facilities like the Apple Valley Business Center offer investors a reliable cash flow without as much risk,” said Mr. Welliver.

Dougherty Mortgage LLC closes Fannie Mae loan for West Wind Apartment Homes Dougherty Mortgage LLC, a full service national mortgage banking firm, recently closed a Fannie Mae loan for the refinancing of West Wind Apartment

Minnesota Real Estate Journal

Homes, a 160-unit market rate multifamily apartment property located in Irving, 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 and was arranged for Multifamily Property Group.

Dougherty Mortgage LLC closes $2.5 million Fannie Mae loan for Professional Park Dougherty Mortgage LLC, a full service national mortgage banking firm, recently closed a $2.5 million Fannie Mae Hybrid ARM Loan for the acquisition financing of Professional Park, a 40-unit market rate multifamily housing property located in Clarksville, Tennessee. The Fannie Mae loan utilized the Green Rewards Program and was arranged by the Atlanta, Georgia office of Dougherty Mortgage for borrower Crossings at Professional Park, LLC.

Dougherty Mortgage LLC closes $510,000 Fannie Mae loan for Hathaway Village Apartments Dougherty Mortgage LLC, a full service national mortgage banking firm, recently closed a Fannie Mae Acquisition/Assumption and Supplemental Loan for the refinance and acquisition financing of Hathaway Village Apartments, a 128-unit market rate multifamily apartment property located in Florissant, Missouri. The Fannie Mae loan was arranged for Linman Commercial, LLC by the Minneapolis office of Dougherty Mortgage.

May 2018

Apartments Dougherty Mortgage LLC closes $3.9 million Fannie Mae loan for Willow Manor Apartments The Minneapolis and Vienna, Virginia offices of Dougherty Mortgage LLC recently closed a $3.9 million Fannie Mae Loan for the acquisition financing of Willow Manor Apartments, a 71-unit market rate multifamily apartment property located in Fort Worth, Texas. The 12-year loan, arranged for Colosseus Property Group III LLC, utilized the Fannie Mae Green Rewards program and has a 30-year amortization schedule.

Dougherty Mortgage LLC closes $16.1 million HUD 221(d)(4) loan for Eastgate Apartments The Minneapolis office of Dougherty Mortgage LLC recently closed a $16.1 million HUD 221(d)(4) loan for the new construction of Eastgate Apartments, a 135-unit multifamily affordable housing property located in Rochester, Minnesota. Eastgate Apartments is anticipated to open in the summer of 2019 with all 135 units restricted to residents earning 60% or less of the Area Median Income, with an additional 27 units restricted to Fair Market Rents. In addition to the HUD-insured first mortgage, the project will receive equity from the sale of Low Income Housing Tax Credits. The project also involved tax-exempt bonds, which were underwritten by Dougherty Mortgage affiliate Dougherty & Company. The loan features a 40-year term and amortization schedule and was arranged for borrower BDKN LLLP. \

The Minneapolis office of Dougherty Mortgage LLC closed a $1.2 million Fannie Mae loan for the acquisition financing of Crowell Square Apartments, a 40-unit multifamily affordable housing property located in Ashville, North Carolina. The 12-year loan features a 30-year amortization schedule and was arranged for IPI Properties 12 LLC.

Dougherty Mortgage LLC closes $16.1 million HUD 221(d)(4) loan for Eastgate Apartments The Minneapolis office of Dougherty Mortgage LLC recently closed a $16.1 million HUD 221(d)(4) loan for the new construction of Eastgate Apartments, a 135unit multifamily affordable housing property located in Rochester, Minnesota. Eastgate Apartments is anticipated to open in the summer of 2019 with all 135 units restricted to residents earning 60% or less of the Area Median Income, with an additional 27 units restricted to Fair Market Rents. In addition to the HUDinsured first mortgage, the project will receive equity from the sale of Low Income Housing Tax Credits. The project also involved tax-exempt bonds, which were underwritten by Dougherty Mortgage affiliate Dougherty & Company. The loan features a 40-year term and amortization schedule and was arranged for borrower BDKN LLLP.

Dougherty Mortgage LLC Dougherty Mortgage LLC closes $2 million Fannie closes $1.2 million Fannie Mae loan for Raleigh Station Mae loan for Crowell Square Townhomes Dougherty Mortgage LLC, a full service national mortgage banking firm, recently closed a $2 million Fannie Mae Hybrid ARM Loan for the acquisition financing of Raleigh Station Townhomes, a 42-unit market rate multifamily housing property located in Clarksville, Tennessee. The Fannie Mae loan utilized the Green Rewards Program and was arranged by the Atlanta, Georgia office of Dougherty Mortgage for borrower Raleigh Meadows, LLC.

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