VOLUME 30, NUMBER 11
Š2014 Law Bulletin Publishing Co.
November 2014
United Properties: Bringing a new type of office building to Minneapolis’ Target Field Station
By Dan Rafter, Editor
T
he North Loop area of downtown Minneapolis has become one of the hottest neighborhoods in the Twin Cities. The development of Target Field Station -- the light-rail commuter station located adjacent to the new home of the Minnesota Twins baseball team -- has helped fuel this. Without the light-rail station, it's difficult to imagine the growth of the Target Field Station mixed-use project and outdoor park that's growing in this neighborhood. Now developer United Properties is providing yet another boost to this growing neighborhood and the mixed-use development with its plans to build Target Field Station Center, a transit-oriented Class-A office building on the final
land parcel remaining at the development. The building, located next to a 288-car public parking ramp, will rise up to 10 stories and include about 240,00 square feet at the southeast corner of Sixth Avenue North and Fifth Street North. Bill Katter, executive vice president for United Properties, said that this building is the latest example of his company's interest in Minneapolis' North Loop neighborhood. "This area continues to be one of the most exciting places for next-generation office space in the Twin Cities," Katter said. Katter listed several reasons why the North Loop area remains such a hot one in the Twin Cities. North Loop to page 16
Tenants flocking to new RBC Plaza in downtown Minneapolis By Dan Rafter, Editor
K
BS Capital Advisors took a risk earlier this year when they approved plans to merge two key buildings on the Nicollet Mall in downtown Minneapolis. Today, though, that risk is paying off as new tenants continue to sign on at the newly renovated RBC Plaza. Two law firms, equity and investment firms, a network communications company and three retailers
have all signed on to lease space at the office and retail center at 60 S. 6th St. in downtown. The new companies account for 125,000 square feet of new leases at RBC Plaza. Sonja Dusil, senior director of brokerage services for Cushman & Wakefield|NOrthMarq -- the brokerage that represents the building -- says that she isn't surprised by this activity. The northern end of Minneapolis' Nicollet Mall area is busy today, with construction taking place on the new home of the Minnesota Vikings and with Target Field -- home of the Minnesota Twins -- still a major attraction.
The area is also home to the new Target Field Station light-rail train station and the newly built Nic on Fifth luxury apartments So plenty is happening in the Nicollet Mall area to attract retailers and office tenants, Dusil said. "There is a pull toward the north end of the mall," Dusil said. "We truly are in the center of that livework-play environment that people want today. There is activity and vibrancy in the mall. That enhances our building, too." RBC Plaza to page 19
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Contents
Minnesota Real Estate Journal
NOVEMBER 2014 • VOLUME 30, NUMBER 11
Page 3
Departments PEOPLE
4
NEWS
6
RESOURCE GUIDE
1
UNITED PROPERTIES: BRINGING A NEW TYPE OF OFFICE BUILDING TO MINNEAPOLIS’ TARGET FIELD STATION TENANTS FLOCKING TO NEW RBC PLAZA IN DOWNTOWN MINNEAPOLIS
10
OPPIDAN HAS BIG PLANS FOR POWER CENTER IN BAXTER. BUT WHAT WILL GANDER MOUNTAIN DO?
12
WORRIES ABOUT THREATS TO 1031 EXCHANGES DOMINATE NAIOP’S ADVANCED LEGISLATIVE SUMMIT
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BEST OF 12 – THE ROAD TO OPPORTUNITY STARTS HERE
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The Minnesota Real Estate Journal (ISSN 08932255) is published monthly for $85 per year by Minnesota Real Estate Journal, 13400 15th Ave North STE C, Plymouth 55441. Phone: 952-885-0815. Periodicals postage paid at Minneapolis, MN. POSTMASTER: Send address changes to Law Bulletin Publishing Co, 415 State Street, Chicago IL 60654. Lanning Macfarland, Jr. chairman; Sandy Macfarland, CEO; and Brewster Macfarland, president. Back issues $10.00. Subscriptions are non-refundable. For more information call 952-885-0815. ©2014 Law Bulletin Publishing Co. No part of this publication may be reproduced without the written permission of the publisher.
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Minnesota Real Estate Journal
November 2014
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EDITORIAL ADVISORY BOARD JOHN ALLEN Industrial Equities ROBERT ANGLESON Navigator Real Estate RICK COLLINS Ryan Cos. US Inc. JEFF EATON Cushman & Wakefield/NorthMarq MARK EVENSON ULG Equis PATRICIA GNETZ US Bank TOM GUMP TAG Consulting JON HEMPEL Hempel Properties DAVID JELLISON Liberty Property Trust CHAD JOHNSON Hellmuth & Johnson BILL WARDWELL Colliers International GEORGE KLUEMPKE Braun Intertec JEFFREY LAFAVRE CBC Griffin Companies WADE LAU Founders Properties MIKE LE JEUNE Fabcon JIM LOCKHART WIPFLI DUANE LUND Exchange Realty PATRICK MASCIA Duke Realty Corp. CLINT MILLER Cushman & Wakefield/NorthMarq DR. THOMAS MUSIL University of St. Thomas WILLIAM M. OSTLUND CBC Griffin Companies WHITNEY PEYTON CB Richard Ellis MIKE SALMEN Transwestern STEWART STENDER Stewart Capital Partners
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MORRISSEY HOSPITALITY COMPANIES, INC. NAMES KEN BOYLES NEW GENERAL MANAGER AT THE SAINT PAUL HOTEL Former Saint Paul Hotel Bellman and 30-year industry veteran ‘comes home’ with top leadership post at Saint Paul and Midwest icon Morrissey Hospitality Companies, Inc. (MHC) has named seasoned hotelier Ken Boyles to be the new General Manager of The Saint Paul Hotel, effective December 1, 2014. Boyles, who leaves a General Manager position at the 300-room Hilton Minneapolis-St. Paul Airport/Mall of America, will bring his varied and successful professional path full circle with his return to The Saint Paul Hotel, where he began his hotel industry career in 1982 as a Concierge and Bellman. “Everyone at MHC and The Saint Paul Hotel is thrilled to welcome Ken Boyles as the new General Manager,” says Bill Morrissey, President and Owner of MHC, which manages The Saint Paul Hotel. “Ken is well-known throughout the hospitality industry for his intelligent leadership and his passionate dedication to customer service, and he truly understands The Saint Paul Hotel’s unique legacy and culture. He is the perfect person for this job.” As General Manager of The Saint Paul Hotel, Boyles will oversee the hotel’s 300 employees and the hotel’s service to the tens of thousands of hotel, restaurant, and event guests it welcomes every year. In addition to his prior general manager post at the Hilton Minneapolis-St. Paul Hotel and the general manager position at the Bloomington Embassy Suites, Boyles has held a range of leadership, management, and sales positions at many other hotels and hospitality companies, including the Embassy Suites Minneapolis St. Paul Airport, and the Doubletree Guest Suites, Radisson Hotel South and Plaza Tower, and the Hotel Sofitel, all in Bloomington. He has also held key posts for the Colorado Resort and Development Corporation. Built in 1910, The Saint Paul Hotel, a member of the Historic Hotels of America and Preferred Hotels of America, is located at 350 Market Street on Rice Park in downtown Saint Paul, Minnesota. The Saint Paul Hotel has received numerous awards, including Conde
Nast’s Gold List award and the prestigious Four Diamond rating from AAA for 31 consecutive years.
Minnesota Commercial Real Estate Women Announce 2014 Celebration Awards Winners Minnesota Commercial Real Estate Women (MNCREW) announced today the recipients of the 2014 Celebration Awards that were recognized at an awards ceremony on Thursday, November 6, 2014. The Celebration Awards recognized not only the award winners, but also the accomplishments of the 2014 MNCREW committees and other individual successes of its members. Brandie Adams of Surfacequest and Wendy Thompson of Suntide Commercial Realty were honored in the category of Excellence in Environmental/Sustainability. Janice Linster and Rebecca Kundysek of Studio Hive and Meghan Huber of JE Dunn Construction received the award for Excellence in Design. Barb Chirinos of Stewart Title was recognized for Excellence in Business Development/Sales, Karon Smith was awarded the Volunteer Contribution award and Emily Nicoll of CBRE was recognized as this year’s Emerging Leader. Cindy Nosan of Guaranty Commercial Title and Carolyn Olson and Eden Spencer of Greater Metropolitan Housing Corporation were honored for their efforts in Economic & Community Improvement. Gena Janetka of Allied Parking, Tamara Simon of Infinia Bank, Barb Chirinos and Robin Armstrong of Stewart Title, Laura Graf of Lindquist & Vennum and Rebecca Goughnour of Stinson Leonard Street were recognized in the category of Collaborative Business. “These women exemplify our chapter’s mission through their contribution in the commercial real estate industry,” said Claire Roberts, 2014 MNCREW President. “They should all be proud of their accomplishments.” Susan Farr, vice president of new business development for Fairview Ebenezer, was the featured speaker at the Celebration Awards.
Ackerberg Hires Mooney as Property Manager ACKERBERG announced that Ryan Mooney has joined the firm as a Property Manager where he is responsible
for the day-to-day all property management activities of Lake Calhoun Center and Lake Pointe Corporate Center. This includes overseeing property maintenance, tenant relations, budgets, project accounting, tenant improvements and financial reporting. Most recently, Mr. Mooney was Assistant Property Manager at Cassidy Turley where he managed a portfolio of 13 properties totaling approximately 1 million square feet. The portfolio contained office, industrial and retail properties. Prior to Cassidy Turley, he worked as a Lease Administrator at CBRE. Ryan is an active member of the Building Owners and Managers Association (BOMA) and the Institute of Real Estate Management (IREM). He is currently a candidate for the designation of Certified Property Manager through IREM and he graduated from Metropolitan State University in 2011.
Bob West Appointed to Board of Directors of the International Association for Cold Storage Construction Ryan Companies US, Inc. is pleased to announce Bob West, Director of Business Development, Industrial has been appointed to the Board of Directors of the International Association for Cold Storage Construction (IACSC). During his three-year term, Bob will serve as Chair of the Marketing and Brand Awareness Committee, which is tasked with building awareness of IACSC in the cold chain industry. “I’m very passionate about IACSC. It’s a top-notch, cutting edge organization always seeking innovation and moving the ball forward in our industry,” said West. “It’s an extreme honor to be on the board and I look forward to bringing true value to the organization.” Bob’s primary role as Chair of the Marketing and Brand Awareness Committee is to broaden the membership base beyond third party logistics and public refrigerated warehouses into the retail, food manufacturing, and food service sectors. IACSC serves as the preeminent global authority in efficient, safe temperature-controlled design and construction. It provides a forum for innovative People to page 26
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News Metropolitan Council awards funds to spur job growth, development, and housing near transit The Metropolitan Council has awarded $6.5 million in Livable Communities funds to transit-oriented development projects in the central cities and the cities of Ramsey and Hopkins. Projects include part of the Downtown East development, two housing developments and a hotel project in Minneapolis; adding a public plaza near the Vandalia water tower in St. Paul where an old industrial site will be restored and reused; a housing development in Ramsey; and an arts corridor in Hopkins. All the projects are near transit. Transit-Oriented Development grants: TOD grants are awarded to projects that help promote economic development, housing, and jobs along transit corridors, where there is, or will be, transit infrastructure and high-frequency transit service. The grants facilitate
Minnesota Real Estate Journal
development that improves mobility and access to transit, enhances connections between destinations, creates efficiencies, and generates economic investment and regional prosperity. "TOD is a top priority for the Council,” said Council Chair Susan Haigh. “Transit and development must go hand-in-hand to ensure the success of both. TOD helps to ensure, as we continue to expand the region’s transit system, that transit supports and enhances the nearby land uses, and the nearby land uses support these major transit investments. “Investment follows investment,” said Haigh. “TOD makes good sense; it creates efficiencies and is sound economics.” TOD grant awards: Aeon Prospect Park, Minneapolis-$1,445,000 primarily to help acquire property for a 65-unit apartment development in the Prospect Park neighborhood along the Green Line. The development models higher density and efficient land use, close proximity to transit, a focus on connections to the sur-
rounding community, and active ground-floor uses to enhance street activity. The project is part of the Prospect North Partnership, a collaboration of residents, developers, and public organizations that work to promote equitable, environmentally-friendly, transit-oriented development near the Prospect Park light rail station. Downtown East, Minneapolis--$1 million for asbestos abatement on the site of the former Star Tribune building. Planned development includes a 133unit apartment building and a four-acre park that will serve as the “front yard” to the new Vikings stadium, and nearby offices, and residential buildings, with nearby access to the Downtown East Station. The urban park is expected to attract additional private investment. Plymouth Building, Minneapolis, $1 million for asbestos and lead-based paint abatement as part of the rehabilitation of the historically significant Plymouth Building on the corner of 6th and Hennepin. The building will be restored and renovated from office space into a 264-unit hotel, with ballroom and
November 2014
restaurant facilities. The building is in close proximity to high-frequency transit, including the Blue and Green LRT lines. Mill City Quarter, Minneapolis-$500,000 to help pay costs related to parking infrastructure and relocation of Xcel Energy lines as part of a housing development for seniors. The development, near the Government Plaza Station, includes affordable housing, independent living, memory care, some retail, and supportive services, such as laundry, meal, and transportation services. Vandalia Tower, St. Paul--$650,000 primarily to help fund sidewalks, landscaping, and stormwater features for a 30,000-square-foot outdoor plaza near the Raymond Avenue Station on the Green Line. The plaza will be anchored by the 100-foot Vandalia water tower and replace what was once a factory loading dock and train spur with seating areas, fountains, and landscaped areas that provide gathering spaces. Factory buildings in the area will be restored and oriented toward the outdoor plaza. The
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Vandalia Tower design includes new pedestrian links to nearby transit stops and bike paths through landscaped sidewalks and plazas. Sunwood Village, Ramsey--$580,000 to help with site acquisition and improvements on nearly two acres of land in the city’s downtown for a housing community. The housing, near the Northstar Ramsey Station, will be affordable, with some units set aside for households experiencing long-term homelessness. The housing services of CommonBond will be available to all residents. The development will promote walking and biking to amenities and the use of non-motorized transportation. The ARTery, Hopkins--$1,325,000 to help fund utilities, infrastructure, and enhancements to support the redevelopment of the Johnson Building near the Downtown Hopkins LRT Station. City plans call for reconstruction of 8th Avenue to create a corridor that attracts pedestrians from the station and draws them into downtown Hopkins. The ARTery will incorporate interactive public art and a public realm that serves
Minnesota Real Estate Journal
as a catalyst to development along 8th Avenue. Grants are awarded on a competitive basis. Applicants must be participants in the Livable Communities program and their proposed projects must meet criteria approved by the Council. Anticipated outcomes from these investments include 262 affordable homes and 765 more jobs, and leveraging nearly $255 million in private investment and nearly $49 million in other public investment. TOD funding comes from a levy for the Livable Communities Demonstration Account and grants the Council previously awarded to communities, but which were returned to the Council when development projects did not move forward as planned during the Great Recession. The Metropolitan Council is the regional planning organization in the seven-county Twin Cities metropolitan area. The Council runs the regional bus and light rail system and Northstar commuter rail, collects and treats wastewater, coordinates regional water resources, plans regional parks and
administers funds that provide housing opportunities for families with low and moderate incomes. The Council board is appointed by and serves at the pleasure of the Governor.
Bridgewater Bank Announces Arrival in St. Louis Park Bridgewater Bank, Bloomington, MN is pleased to announce their fourth branch, currently under construction, is slated to open in St. Louis Park on January 5th, 2015. Located at 4400 Excelsior Boulevard, the new location will serve this in-demand first ring suburb. Bridgewater Bank’s original strategic plan, written when the bank was founded in 2005, called for a future branch site in St. Louis Park. After considering several sites the location on Excelsior Boulevard was chosen for its proximity to the newly refurbished core, an ease of access for local residents and the opportunity to continue contributing to the revitalization. “This thriving community is energized with an entrepreneurial spirit, yet
November 2014
there are virtually no entrepreneurial focused banks serving the population.” said Jerry Baack, Chief Executive Officer, President and Chairman of the Board. “More specifically, Bridgewater Bank will be the only local bank to have a physical presence in the Excelsior and Grand corridor.” Conveniently located near the corner of Excelsior Boulevard and Monterey Avenue, the branch will provide a new banking option for the prosperous residents of this area who appreciate an unconventional banking experience. In nine years, Bridgewater Bank has established itself as one of the top 20 largest banks in the Twin Cities. The Bank has seen remarkable growth. As of September 30th, the bank reported assets of $662 million representing a year over year growth rate of over 22%. The bank’s committed focus to real estate is one of the drivers of this rapid growth. The bank has built a solid reputation as a bank that understands the market and can finance several unique sectors of the real estate industry, includNews to page 20
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Minnesota Real Estate Journal
November 2014
Oppidan has big plans for power center in Baxter. But what will Gander Mountain do? By Dan Rafter, Editor
O
ppidan Investment Company has big plans for Baxter, Minn., a resort town located about a two-hours drive north of Minneapolis. But these plans hinge on the plans of Gander Mountain. The retailer is leasing a 117,000-square-foot retail site in the city, a lease that is due to expire in the near term, though no one is releasing an exact date for this. Oppidan purchased the retail site earlier this year, spending more than $3 million to do so, and plans to redevelop it into a retail power center. But whether this will happen depends largely on the future plans of Gander Mountain. "For years, developers, includin Oppidan, have had their eye on this property and have seen the potential for a multi-tenant retail center," said Paul Tucci, a developer with Oppidan. "With the amount of time left on Gander's lease, the time was right to acquire this property and begin planning for its future."
Joe Ryan The future What that future will look like is still uncertain. But Oppidan officials say that they have already initiated talks with about 12 potentail retail tenants who would be interested in leasing space in a new power center in Baxter. And the mix of potentail tenants is a varied one: Oppidan has spoken with grocers, sporting-goods retailers, pet
stores and restaurant clients, among others. Joe Ryan, chief executive officer for Oppidan, said that the time was right to purchase this property. And the 117,000-square-foot site near the intersection of highways 371 and 210 in Baxter has long been one that Oppidan has desired. "We have had this property under purchase agreement earlier," Ryan said. "Five years ago, we were going to do the same thing. But Gander Mountain had a long time remaining on its lease. Now Gander Mountain is nearing the end of its lease. We acquired it not knowing what their plans are. But we think enough of this site that the move made sense for us." Ryan would not say when Gander Mountain's lease is set to expire, only that the lease is nearing its end. The retailer is out of options. Once its lease expires, Gander Mountain would have to enter into negotiations for a renewal or leave the site. The timeline, then, for redevelopment of the site is a bit sketchy. Ryan said that if Gander Mountain does not
enter into a new agreement for the site, then Oppidan could start re-developing the site by late 2016. Even with this uncertainty, the site's potential has Ryan excited. "We have been active in this market for a dozen years. It's a great destination in central Minnesota," Ryan said. "It's a huge vacation resort area. There are summer cabins all over the area. The housing market there is growing. We are excited to be a part of the Baxter market." The Baxter-Brainerd community has seen a retail boom in recent years. One of the biggest additions? A Costco store that recently opened just south of the Gander Mountain site. Other big-name retailers in the market include Maurice's, Kohl's, JC Penney, Target, The Home Depot and a new Super Walmart.
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Minnesota Real Estate Journal
November 2014
Worries About Threats to 1031 Exchanges Dominate NAIOP’s Advanced Legislative Summit by Brandon Champeau Vice President, United Properties Chair, Public Policy Committee NAIOP, The Commercial Real Estate Development Association-Minnesota Chapter
I
t’s open season on 1031 Exchanges in Washington, and the prognosis is not good. Often described as “the lifeblood of investment real estate,” the ability to exchange like-kind investment and business use properties---and a host of other types of assets—on a tax-deferred basis is in the crosshairs of no less than three government bodies: the White House and Treasury, the Senate Finance Committee and Ways and Means Committee. All three propose to either completely do away with 1031 exchanges or do enough damage to them that real estate investment activities would plummet. I just returned from NAIOP’s Advanced Legislative Summit in Philadelphia, a briefing and coaching session conducted each fall by
Brandon Champeau NAIOP’s national headquarters staff, where discussions about the potential for repeal of 1031 exchanges dominated the conversation. Since 1921, Federal tax law under Internal Revenue Code 1031 has permitted taxpayers to exchange business-use or investment assets for other
like-kind business use or investment assets without recognizing taxable gains on the sale of the old assets. The taxes which otherwise would have been due from the sale are then deferred. Section 1031 transactions range from simple trade-ins or 2-party swaps to more complicated, nonsimultaneous exchanges involving separate buyers and sellers. The range of assets which qualify for such exchanges is broad: aircraft, trucks, trailers, railcars, ag equipment and even livestock. But the largest affected asset class by far involves commercial, agricultural and rental real estate. The Federation of Exchange Accommodators (FEA), a professional group made up of Independent thirdparty “Qualified Intermediaries” (QI), says that IRC 1031 is “neither a loophole, nor a tax savings vehicle,” as it is being characterized by some individuals involved in the drive to reduce the federal deficit by reforming the tax code, “but rather a powerful economic engine based on sound tax policy.” QI’s, operating under safe harbor reg-
ulations, assist with technical compliance in exchanges, hold sale proceeds and disburse funds for the purchase of replacement property. 1031 Exchanges Are Not A Tax Avoidance Scheme “The gain does not go away,” says the FEA. “Any tax will be paid, most likely by the eventual sale of the replacement asset,” or incrementally, through increased income tax due to foregone depreciation, or ultimately, by inclusion in the owner’s taxable estate upon death. “Over the tax life of a depreciable asset, 1031 is revenue neutral,” according to the organization. A 2013 survey by the Realtors Land Institute found that 35% of all land sales in the U.S. involve a 1031 exchange, and predicted a 30% decrease in transaction volume if it were to be eliminated, an impact it describes as “devastating to the real estate economy.” FEA estimates that 30% of all commercial real estate sales and purchases involve 1031 1031 to page 14
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1031 from page 12
exchanges. Lacking a tax deferment, many property owners would simply choose not to sell rather than face a big tax bill. In my view, it’s scary to imagine what a 30% reduction in real estate transactions would do to our economy, in terms of jobs, investment and overall growth, and to our chapter’s members and their families. Members of NAIOP’s national headquarters staff--Tom Bisacquino, president; Aquiles Suarez, vice president for government affairs; John Bryant, senior director for federal affairs; and Toby Burke, senior director of state and local affairs—are very concerned about the issue. Commenting at the Legislative Summit, they share FEA’s view that “tax reform is 100% alive in 2015,” and say that if the repeal of 1031 remains in the tax reform drafts, “it would be devastating to our industry.” Even if tax reform doesn’t take place next year, any new drafts of legislation developed in 2015 will likely serve as the foundation for tax reform efforts in the future, with the potential for big losses for real estate and manufacturing if 1031 eventually goes away. One of our industry’s most important arguments against eliminating Section 1031 like-kind exchanges is that such an action could trigger an overall
Minnesota Real Estate Journal
decline in real estate values, causing the banking system to return to the unstable conditions of the 2009 recession--and with it, a shortage of credit-crimping economic activity even further. Such a drop in real estate values would create a reduction in owner equity that could cascade into devaluation of the collateral for loans, causing a technical default under most loan agreements, with the loan-to-value ratio upside down, which can only be cured by the borrowers injecting more capital. Failing that, properties would be pushed into foreclosure, triggering further reductions in value, not just for one parcel, but for others nearby. Another concern cited by NAIOP’s staff is that elimination of 1031 exchnges would tax cash flow, not wealth. A 1031 exchange enables a continuity of investment by the taxpayer, without reducing the cash flow available to support the growth of the business or improvement of the property. The taxpayer-owner doing an exchange does not take any profit from the transaction: that profit is being reinvested in the property or the business. Opposition to Repeal is Broad and Growing So far, 46 national, regional and state business and industry associations
have indicated their support for retaining Section 1031 like-kind exchanges as they currently exist. NAIOP, BOMA, AGC, ICSC, IREM, NAR, CCIM, SIOR and other real estate organizations with strong representation and significant numbers of members in the Twin Cities and Minnesota marketplace are joining together to oppose repeal.. The impact of repeal on NAIOP Minnesota and its members and their business tenants and clients could be significant. Our Minnesota chapter will be actively supporting the national staff’s efforts to defend 1031, through grass roots letters to members of tax writing committees and our own Congressional leaders; meetings with our own legislators; educating the media on its importance to our industry; and helping to build broad unified support from our business coalition partners, local chambers of commerce and other trade associations. Water Policy and Transportation Infrastructure Are Other Issues of Concern Although worries about the threats to 1031 exchanges dominated NAIOP’s legislative summit, several other emerging legislative issues were addressed as well. Most notable are proposed rule
November 2014
changes regarding protected waters. The Clean Water Act requires landowners who have federally protected waters on their sites to obtain a federal 404 permit any time they disturb, dredge or attempt to fill such a body of water, most often a wetland. Obtaining a permit can cost between $13,000 and $32,000, and can delay development for years. The EPA and the Army Corps of Engineers are currently trying to define which streams, lakes, ditches and ponds are under federal control, using an administrative procedure called “rulemaking,” which has the force of law. Unveiled in April, the question has become very controversial as affected parties try to determine which types of waters will require federal permits and which will not. Particularly concerning is a new definition of “tributaries” to federal waters—those which contribute “flow to a water of the United States.” NAIOP has worked closely with EPA staff to clarify the status of stormwater control ditches. The EPA has so far said these will not require permits, but there is still apprehension in our industry that the definition of a tributary is too broad and could have unintended consequences. NAIOP will continue to be actively involved in this issue as it develops. 1031 to page 16
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North Loop From page 1
"The evolution and emergence of the North Loop is exciting. This is now the hottest development district in the Twin Cities," he said. "We have transit here. We have a really rich package of amenities. We have alternative types of places to live and different types of places to work. We are seeing everything from new construction projects to renovations to 100-year-old buildings. It's a unique canvas. Building in this environment is an exciting opportunity." Before construction begins, United Properties will buy the .75-acre site from Hennepin County. The company will then begin the planning and entitlement process with the city of Minneapolis in early 2015. If all goes according to plan, United Properties will break ground in the fall of 2015 and complete the building sometime in late 2016. The office building itself will boast several high-end feature. United Properties is planning for exposed ceilings and large, open office spaces that will mimic the feel of other North Loop and Warehouse District buildings here.
Minnesota Real Estate Journal
Building amenities at Target Field Station Center will include a restaurant across from the entrance to Target Field Station; a rooftop terrace with a lounge, bike storage, fitness center; and underground executive parking. United Properties will seek U.S. Green Building Council LEED certification for the building's shell. Katter said that the amenities are a necessity. Tenants today are demanding more from their office space. "People are looking for something other than where their parents worked," Katter said. "They want higher clear heights. They want different interior materials than sheetrock wall. They want expose brick, timber or steel. They like breakout space and outdoor roof decks. They want collaborative spaces." And when work is over? They want to be in a neighborhood that features plenty of restaurant and entertainment choices. "If they want to get a beer after work or a quick lunch during the day, they don't want to have to think too hard about where they can get that done," Katter said. "They want to be able to bike to work. We are on a bike path at this site. That is an important attribute of North Loop areas. All of these things
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are important." And what’s less important to today’s office users? “People aren’t as interested in that all-glass building look,” Katter said.
“Views are still important. But people are looking for other quality-of-life amenities today.”
1031 from page 14
Also addressed at the summit were the growing problems affecting freight mobility and infrastructure, particularly surrounding the nation’s port facilities. Although of more concern to major ports on the coasts, Duluth—the nation’s only freshwater seaport—is experiencing its own infrastructure limitations, which are intimately connected to Minnesota’s larger transportation challenges, including truck and rail connections as well as our deteriorating system of roads and bridges. Since ports must share highway and rail infrastructure, the need for substantially increased investment in maintaining and improving the “ports-toroads” and intermodal supply chain—real, long-term sustainable funding-is on the radar federally as well as locally, and will be a hot topic in Minnesota in the upcoming session. As always with legislative actions affecting our industry and the thousands of business tenants and clients they serve and support, NAIOP Minnesota’s 750 members--through the public policy committee-- intend to play a leadership role in public discussions and decisions related to all of these issues.
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Minnesota Real Estate Journal
November 2014
Community Spotlight
Best of 12 – The Road to Opportunity Starts Here The Best of 12 is home to the cities of Delano, Montrose, Waverly, Howard Lake, Cokato and Dassel. These six vibrant cities are united, working together to create a better place to live, work and explore. These cities invite you to explore the 26 mile stretch of Highway 12 which offers opportunities for commercial and industrial development. The Best of 12 cities offer residents and businesses an economical advantage in providing significant savings in taxes, land and real estate values when compared to other metro markets. The Best of 12 cities and the individual Economic Development agencies in each city are poised and ready to assist businesses seeking a new location. The Best of 12 communities are home to approximately 520 businesses, which provide nearly 6,700 jobs including over 1,400 manufacturing jobs. An educated workforce and available industrial lots are available in each of the Best of 12 communities. For information on available commercial and industrial sites contact the following Best of 12 cities:
Best of 12 Cities include: Dassel – A lot to crow about. Population 1,469. Dassel, located in Meeker County is the most westerly member of the Best of 12 cities. The community is proud of its tradition and progressive achievements. Dassel is home of the Red Rooster Days, quality education and cultural activities. Dassel was named the runner-up in Bloomberg’s Businessweek, December 2010’s “Best Place to Raise Your Kids in MN”. www.dassel.com . 320275-2454. Cokato – In the midst of opportunity. Population 2,694. Located 40 miles west of the twin cities area and a short distance from St. Cloud and Hutchinson, Cokato offers a wide variety of housing option, a fantastic school system, beautiful lakes, trails, golf and fishing, making the area desirable for the sportsman. Cokato was listed in Bloomberg’s Businessweek, December 2010 financial news website Best Place to Raise your Kids in Minnesota! www.cokato.mn.us. 320-2865505. Howard Lake – Home of the good neighbor. Population 1,962. Howard
Lake offers a beautiful and integrated trail system, scenic lakes perfect for any recreation or leisure activity, beautiful parks, and established housing developments with room for affordable growth. A quaint downtown with boutiques, restaurants and shopping offer an economic advantage for starting a business. www.howard-lake.mn.us. 320-543-3670. Waverly – A rich history and a bright tomorrow. Population 1,357. Waverly is the home town of Hubert H. Humphery, former Vice President of the Unite States. Waverly takes pride in its small town atmosphere, lakes and parks and quality education. Waverly’s Humphrey Elementary School was one of seven schools to be named a 2012 National Blue Ribbon School. www.waverlymn.org.763-658-4217. Montrose – It’s good to be home. Population 2,847. Montrose has the unique advantage of being located near the twin cities metropolitan area while retaining the rural small town charm. Located 25 miles west of the twin cities, Montrose’s population grew 150% between 2000 and 2010. The city offers plenty of opportunities for
continued residential, commercial and industrial growth. www.montrosemn.us. 763-575-7422. Delano – The Spirit of Community. Population 5,464. Delano offers a high quality of life with nationally recognized schools, access to beautiful parks and trails and a growing commercial and industrial base. Delano was named “Best schools for your Housing Buck in the country” by Forbes Magazine in the September 26, 2013 edition. The Delano Elementary School was a 2013 Blue Ribbon School. Located within 20 minutes of the twin cities, Delano is a great place to live, work and explore. www.delano.mn.us. 763-9720550. The Best of 12 cities invite residents, commercial and industrial businesses to visit the Highway 12 corridor, contact local officials in each community and explore opportunities! For more information on the Best of 12 and its member cities, visit www.bestof12.com
November 2014
RBC Plaza From page 1
A big change What is now RBC Plaza was once two separate buildings. There was the four-story 68,700-square-foot retail building Gaviidae Common II at 555 Nicollet Mall. And next store was the 40-story RBC Plaza office tower. But in January of this year, construction crews began the process of merging the two buildings into one central RBC Plaza site. Crews converted the third and fourth floors of the former Gaviidae II space, which previously served as a food court, to 60,000 square feet of contiguous office space. Each 30,000-square-foot floor today offers 16-foot ceilings and expanded windows facing Nicollet Mall and 6th Street. The first floor of the former Gaviidae II space merged with the existing lobby of the RBC Plaza. That lobby today is large and spacious. Construction also brought a new amenities package to the new RBC Plaza, one that includes a conference center, fitness center and break-out areas on the lower level and main lobby for casual meetings. The new tenants will begin occupying their space in the building -- owned by KBS REIT III and operated by KBS Capital Advisors -- before this month ends. One of the key moves at the building is the expansion of intellectual property and litigation law firm Fish & Richardson, a current tenant that will occupy the entire fourth floor of the plaza. That will boost the amount of space that the firm is leasing from 50,000 square feet to 80,000 square feet. The firm is expected to move into the space in June of 2015. "We are delighted that one of our existing tenants of the tower recognizes the benefits of extending its footprint," said Giovanni Cordoves, senior vice president for KBS. In August of 2015, law firm Best & Flanagan, LLP will move its 100 employees from its current location in the Capella Tower at 225 S. Sixth St. in Minneapolis to 28,000 square feet on the 26th and 27th floors of the RBC Plaza tower. New tenants of the building include law firms Hessian McKasy and Norton Rose Fullbright. Other new tenants are financial and legal advisory firm eggen, PLLC; Hillcrest Capital, a private equity firm; Isles Ranch Partners, an investment management firm; Joern, Samaha & Associates, a financial planner; and Windstream, a network communications company. Retailers The Fresh Market, Sprout and Subway will soon open in the building's renovated street and skyway levels. Dusil said that part of what attracted these tenants is the new amenity package now part of RBC Plaza. Adding
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these amenities was one of the reasons for the renovations here, she said. "Historically, the RBC Plaza hasn't offered a tenant amenity package," Dusil said. "We needed to add that. The challenge was in taking Gabiidae II, a former retail mall, and RBC Tower, a historically well-occupied Class-A boutique office tower, and combining them. We enhanced the building's draw by doing that and adding the amenities package."
Dusil said that she is thrilled with the results. She is also excited about the activity taking place on the north end of Nicollet Mall, and expects to see even more tenants seek space in RBC Plaza so that they, too, can take advantage of the amenities now in the area. "Before, the pull was more on the south end of the mall," Dusil said. "There was the new Target there and Target's headquarters. That is changing. Now the pull and activity is on the north
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end of the mall. The North Loop and Warehouse District areas are growing and expanding neighborhoods, too. So we are adjacent to a lot of vibrant neighborhoods. You see cranes and hammers here. You see people here. This was once a much quieter corner of downtown Minneapolis. Now it is the place to be."
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News From page 8
ing but not limited to; multi-family housing; commercial real estate; construction and land development; student housing; senior housing; and residential rehabs. “As a full service bank with an unparalleled understanding of the local real estate market we wanted to be closer to many of the real estate projects we finance. The bank has been involved in financing several local projects partnering with developers, real estate investors, builders and individual home owners.” commented Jeff Shellberg. Executive Vice President, Chief Credit Officer.” The bank plans to continue serving this entrepreneurial market and is eager to have a physical presence in this neighborhood.” As of September 30, 2014, the bank posted pre-tax earnings of $13.4 million, representing a pre-tax ROA of 2.71%. “We have a history of producing above average returns which in turn
Minnesota Real Estate Journal
provides the flexibility to fund record growth,” said Jerry Baack, “ In August, 2013 Bridgewater opened a very productive office in Downtown Minneapolis. I anticipate that The St. Louis Park branch will be another key contributor to driving deposits, building brand awareness and ultimately enhancing the franchise value.”
Innoflex Corporation Renews Lease in New Hope CBRE announces 72,731-squarefoot lease renewal at 7101 31st Avenue in New Hope. Located at 7101 31st Avenue in New Hope, Minnesota, Louisiana Distribution Center has excellent access to Highway 100 and Highway 169. The 195,754-squarefoot, distribution building features high ceilings, flexible floors plates and a large truck court.
CityPlace adds Verizon Wireless, Café Zupas & Wedding Day Diamonds CityPlace continues its momentum
by adding complementary uses to the existing Class A office building, advancing the implementation of a mixed-use corporate experience. Last month, the partnership of Floridabased Elion Partners and Minnesota’s Kraus-Anderson announced Whole Foods Market as an anchor tenant. Woodbury’s CityPlace has now signed new leases with Verizon Wireless, new-to-market Café Zupas and Wedding Day Diamonds. Senior Vice President Chris Simmons of Welsh Colliers International represented the owner in the transactions. “We are excited about the momentum building at CityPlace,” said Juan DeAngulo, managing principal with Elion Partners. “In addition to welcoming three more retailers, Elion Partners and Kraus-Anderson recently finalized the disposition of the land for the 116room Residence Inn by Marriott. The hotel component is another fundamental complement to the existing office building and key amenity behind the project’s work-play concept.”
November 2014
According to DeAngulo, the overall activity is a true testament to the desirability of this location. “We are confident our future tenants, both office and retail alike, recognize the built-in customer-base and first-class amenities CityPlace has to offer.” DeAngulo also noted that the joint venture recently launched a new marketing campaign to reposition and tenant the existing 400,000-square foot office building as it continues to revitalize the 100-acre parcel. With Whole Foods Market as an anchor, CityPlace is seeing increasing interest from strong national and regional brands that aim to leverage the grocer’s drawing power, and capitalize on the sites prominent location in the vibrant Woodbury trade area. “CityPlace offers merchants and restaurateurs a unique opportunity to easily capture a demographically robust core customer profile, which is the foundation for generating repeat business and driving sales,” said Simmons. Located at the northeast corner of Radio Drive and Hudson Road, the
November 2014
master-planned development carefully weaves a mix of uses with pedestrianfriendly streetscapes. With Class A office space, shopping, restaurants and a hotel, CityPlace offers a unique mixed-use campus that caters to employers who value easy accessibility, walkability and a balance of worklife integration. Redevelopment of the 100-acre project is well underway with anticipated construction delivery of the first phase of retail set for the summer of 2015.
Meridian Land Company begins residential development in Victoria with Gonyea Homes Meridian Land Company has acquired land to develop new singlefamily homes in Victoria, Minnesota. Together with builder Gonyea Homes, Meridian Land will develop Arbor Woods, an eight-acre site that will include 15 single-family lots. Located at the intersection of Bavaria Road and County Road 18, the first model home will be complete for the spring 2015
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Parade of Homes® presented by the Builders Association of the Twin Cities. As a residential land developer, Meridian Land will oversee infrastructure improvements on the site. Once the improvements are complete, Gonyea Homes will purchase the 15 lots from Meridian Land and begin construction of single-family custom homes. “As our first development with Gonyea Homes, we are excited to partner with them on Arbor Woods,” said Chris Wold, vice president, Meridian Land Company. Homes will be priced starting in the low $600,000s. Most home sites will have mature trees and long views across a wetland preservation area. A majority of the home sites will afford look-out and walk-out lower levels. Lot reservations begin in November 2014. “We look for settings for our homes that are unusual or unique in some way,” said Tyler Wenkus, CFO, Gonyea Homes. “This property is par-
ticularly appealing for its mature trees and scenic character. Arbor Woods offers access to recreation and amenities, plus the privacy and natural beauty our clients demand.”
CBRE’s Multifamily Group Announces Sale of $78 Million Portfolio A Chicago, IL based real estate venture recently sold a three property suburban Minneapolis portfolio consisting of 606 units to Weidner Investment Services, Inc., based in Kirkland, Washington, for over 78 million dollars. Abe Appert, Keith Collins and Laura Hanneman of CBRE’s Minneapolis office represented the seller. In Minnesota, Weidner has acquired six apartment projects in the last 13 months, totaling 1,236 units, with an additional 138 unit project currently under construction. They own over 40,000 apartments in the US and Canada. The recently acquired portfolio includes Greens at Edinburgh in Brooklyn Park, Plymouth Square at
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37th in Plymouth, and Town Centre at Lexington in Eagan. Each property has a complete amenity package including underground heated parking, swimming pool(s), community room, and fitness center. Other community amenities at select properties include a hot tub, sauna, billiards room, tennis courts, basketball court, gas grills, playground, walking path, and/or car wash area. Each apartment in the portfolio has a washer and dryer, private patio or balcony, and complete kitchen appliance package (including dishwasher, disposal, and microwave). Select apartment homes may have a fireplace, walk-in closet, vaulted ceilings, and/or bay window. Greens at Edinburgh is adjacent to Edinburgh USA Golf Course and almost half of the apartments offer spectacular views of the course. Plymouth Square at 37th is in a premier location next to Plymouth Creek Park, Plymouth Town Center, and Lifetime Fitness. Town Centre at Lexington is in an exceptional Eagan location near News to next page
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Promenade Shopping Center, Eagan Town Centre, and major employers.
MARCUS & MILLICHAP ARRANGES THE SALE OF A 42,531-SQUARE FOOT NETLEASED 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 Shopko Hometown, a 42,531-square foot net-leased property located in New Hampton, Iowa, according to Craig Patterson, regional manager of the firm’s Minneapolis office. The asset sold for $1,625,000. Adam "AJ" Prins, Matt Hazelton and Mike Marzinske, investment specialists in Marcus & Millichap’s Minneapolis office, had the exclusive listing to market the property on behalf of the seller, a limited liability company. The buyer, a limited liability company, was also secured and represented by Adam “AJ” Prins, Matthew Hazelton
Minnesota Real Estate Journal
and Mike Marzinske. Barry A'Hearn, Broker in Iowa, assisted in closing this transaction. Speaking with Mr. Hazelton, “Shopko has operated out of this building since 1996, originally as a Pamida store, and now a Shopko Hometown after the two merged in 2012. The amount of interest this property received is a clear indicator that there is still significant demand for properties occupied by strong tenants with a good history of occupancy.” Shopko Hometown is located at 660 Milwaukee Street West in New Hampton, Iowa.
CBRE ANNOUNCES SALE OF ALDRIN DISTRIBUTION CENTER I CBRE announces the sale of 935 Aldrin Drive, a 200,000-square-foot bulk/warehouse building located in Eagan, Minnesota. The 100% occupied property is the North American distribution center for Normark Corporation dba Rapala USA. The sale price was $12,018,985. Steve Lysen and Mindy Rietz with
CBRE’s Investment Properties Group based in Minnesota represented the seller. The 200,000-square-foot, crossdocked facility was constructed in 1998 and features a 30' clear height, efficient rectangular footprint, 50' x 50' column spacing, ESFR sprinkler system, 36 dock doors and three drive-in doors. The property is conveniently located near I-35E off Yankee Doodle Road. The CBRE Minnesota Investment Properties Group of Steve Lysen, Mindy Rietz, Jim Leary and Jeff Budish specializes in the disposition of office, industrial and retail properties throughout the Upper Midwest.
LEASES COMPLETED AT UNIVERSITY INDUSTRIAL PARK IN MINNEAPOLIS CBRE announces leases totaling 125,324 square feet of office/warehouse space at CSM Corporation’s University Industrial Park in Minneapolis, Minnesota, since August 2014. The complex is located at 2000 Elm Street and is currently 75% occu-
November 2014
pied. Leasing includes: - Crescent Electric – 45,140 SF - Pace Analytical – 38,871 SF - 41,313 SF lease renewal The three building industrial park features a high-quality image, 24’ clear height, an extensive glass-line, air-conditioned warehouse and a prominent infill location. This business park offers a short commute to both the Minneapolis and St. Paul CBD and close proximity to retail, restaurant and hotel accommodations. “The central location that University Industrial Park offers was an integral component in our ability to land Crescent as a new tenant, execute a key lease renewal and expand Pace within the park,” says Mike Bowen, Associate in CBRE’s Minneapolis office. The CBRE team of John Ryden, Matt Oelschlager and Mike Bowen represent the owner, CSM Corporation as the exclusive leasing agent for University Industrial Park.
November 2014
MARCUS & MILLICHAP ARRANGES THE SALE OF A 24-UNIT APARTMENT BUILDING Marcus & Millichap (NYSE: MMI), a leading commercial real estate investment services firm with offices throughout the United States and Canada, today announced the sale of Scenic Valley Apartments, a 24-unit apartment property located in Osceola, Wisconsin, according to Craig Patterson, regional manager of the firm’s Minneapolis office. The asset sold for $980,000. Evan Miller, Dan Linnell, Mox Gunderson and Jon Ruzicka, investment specialists in Marcus & Millichap’s Minneapolis office, had the exclusive listing to market the property on behalf of the seller, a limited liability company. The buyer, a limited liability company, was also secured and represented by the listing team of Marcus & Millichap’s Minneapolis office. Matthew Fitzgerald, Regional Manager and Broker of Marcus & Millichap’s
Minnesota Real Estate Journal
Milwaukee office, assisted in closing this transaction. Speaking with Mr. Miller, “This offering attracted multiple offers within the three-week marketing process, with interest both locally and regionally from the Twin Cities. The property closed at 100 percent of the list price with a capitalization rate at 7.52 percent.” Scenic Valley Apartments is located at 290 Zindaus Street in Osceola, Wisconsin. With 24 total units, the single free standing apartment building includes 1.20 acres and is made up of 16 one-bedroom units and eight twobedroom units. The property was originally developed by a partnership as a USDA Rural Housing 515 property and was operated as such until about one year ago. Today it is classified and run as a market rate property. Over the more recent years the property has undergone numerous improvements including roof, windows, siding and unit upgrades.
U.S. BANK CLOSES ON FINANCING FOR SOUTH QUARTER IV IN SOUTH MINNEAPOLIS U.S. Bank and Aeon closed on taxcredit equity and construction debt financing for the fourth and final phase of the South Quarter affordable housing development in South Minneapolis. Located at the intersection of Franklin and Portland avenues, the redevelopment project began more than a decade ago. With financing now in place, construction is underway and is expected to finish in the fall of 2015. Aeon, in partnership with Hope Community, has redeveloped the intersection with three affordable housing apartment buildings since 2002. This fourth phase, on the northwest corner of the intersection, is the largest project with 120 units, an urban teaching garden space, and underground parking. The apartments range from studios to one-, two- and three-bedroom units. “This final phase of South Quarter is
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a long time in the making,” said Alan Arthur, president and chief executive officer for Aeon. “Between the economic downturn and the project’s complex public-private financing package, Aeon and Hope have overcome a number of hurdles along the way to bringing much-needed affordable housing, and capital investments to the neighborhood.” U.S. Bank’s financing package include more than $14 million in lowincome housing tax credit equity invested by U.S. Bancorp Community Development Corporation and a $19 million construction loan from U.S. Bank Community Lending Division to be repaid with equity and other permanent financing once construction is complete. Funding sources for the $36 million project also include Minnesota Housing Finance Agency and Hennepin County, among others. “We’re pleased to play a role in this high-profile project,” said Phillip Trier, market president for U.S. Bank. “The South Quarter project, along with nearNews to next page
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Minnesota Real Estate Journal
News from previous page
by commercial development, is transforming the intersection into a vibrant part of South Minneapolis.” Aeon is a nonprofit developer formed in 1986 to help address the need for stable, attractive, affordable apartment homes. U.S. Bank and Aeon have been longtime partners through the development financing, volunteer board service and community involvement activities.
CBRE ARRANGES $35.2 MILLION FINANCING FOR WESTRIDGE MARKET SHOPPING CENTER IN MINNETONKA, MN CBRE Capital Markets’ Debt & Structured Finance team has arranged $35.2 million in financing for the recapitalization of Westridge Market Shopping Center in Minnetonka, Minnesota. Murray Kornberg, Doug Seylar and Ben Bastian of CBRE’s Minneapolis office worked on behalf of the property owner, CSM West Ridge, LLC, to
secure a new 10-year loan used to retire the existing CMBS financing. The borrower will benefit from a low fixed interest rate at almost half of the previous rate put on place at shortly after the project opened in 1997. The financing was originated through CBRE’s correspondent relationship with Voya Investment Management, with funding from Security Life of Denver Insurance Company. “CSM took advantage of the aggressive financing terms available in the market to put long-term debt on the irreplaceable legacy asset in their portfolio,” said Mr. Kornberg, Senior Vice President with CBRE Capital Markets. Located at 11210-11500 Wayzata Boulevard, the 100% leased Westridge Market Shopping Center is in proximity to Downtown Minneapolis along the I-394 Corridor. The area has a strong retail presence and demographics, and is close to Ridgedale Mall, a one million-square-foot regional shopping center. Tenants include Dick’s Sporting Goods, Staples, Romano’s Macaroni Grill, Shane Co., Sprint,
November 2014
Trader Joe’s, Bed Bath & Beyond, Michaels Stores, and Land’s End.
The Opus Group® Announces Completion of Work on Four Gander Mountain Retail Stores The Opus Group (Opus) announced today the completion of four projects for St. Paul, Minnesota-based retailer Gander Mountain. Opus built three new 52,000-square-foot Gander Mountain stores in Augusta, Georgia; Newnan, Georgia and Algonquin, Illinois; and managed renovations of the retailer’s 96,275-square-foot store in Forest Lake, Minnesota. “These projects mark a new milestone in Opus’ ongoing partnership with Gander Mountain,” said Chad Olmschenk, project manager for Opus Design Build, L.L.C. “With projects across the Midwest and Southeast United States, our work required careful coordination and strong communication with Gander Mountain to meet its schedule. We’ve built tremendous momentum working with Gander
Mountain and we are proud to have helped this retailer achieve its vision for these spaces.” Opus began its partnership with Gander Mountain in 2012 and has since completed work on eight stores for the outdoor sport and recreation retailer. “Opus has been a great partner in our drive to bring a fresh and exciting retail experience to countless outdoors enthusiasts in our markets across the country,” said Eric Jacobsen, Gander Mountain’s executive vice president and director of real estate. “At this time of unprecedented growth for Gander Mountain, with over 150 stores in 26 states and more on the way, working with Opus and their top-notch implementation of our retail vision has been a huge benefit to our business.” The three new stores in Georgia and Illinois reflect Gander Mountain's new prototype design featuring timber and stone features, custom high-end fixtures, dynamic lighting, open sight lines and outdoor lifestyle graphics. The renovation of the retailer’s Forest
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Lake, Minnesota store helped to do the same in an existing space. Work at the existing store included new flooring, changes to the space’s floor plan and enhancements to lighting, fixtures, graphics and more. Opus Design Build, L.L.C. served as general contractor in its work with Gander Mountain. The four projects were completed this fall.
MILWAUKEE BASED APARTMENT OWNER ENTERS MINNEAPOLIS MARKET Milwaukee, Wisconsin based Mandel Group, Inc. recently acquired the 282 unit Lemay Lake Apartments in Eagan, MN. Keith Collins, Abe Appert and Laura Hanneman of CBRE’s Minneapolis office represented Oly IDA Lemay Lake, LLC. “The property appealed to us because of the strong economic metrics that characterize the Eagan submarket,” commented Jason Babcock, Senior Acquisitions Manager for Mandel Group. “Besides being a solid prop-
Minnesota Real Estate Journal
erty with value-add upside potential, the accessibility of jobs, shopping, entertainment, public services and institutions is superior. Overall, the Twin Cities metro market displays the right characteristics to drive the success of apartment assets.” This was Mandel’s first apartment acquisition in the Twin Cities. They currently own multifamily properties in Milwaukee and Madison, Wisconsin, as well as mixed-use retail/commercial properties.
CBRE ANNOUNCES THE SALE OF THE WINNETKA DISTRIBUTION CENTER, NEW HOPE, MINNESOTA. CBRE announces the sale of Winnetka Distribution Center located in New Hope, Minnesota, to One Liberty Properties, Inc. for $7,200,000. The seller was Exchange Realty, Inc., a Minneapolis based private equity firm was represented by the CBRE Institutional Properties group in Minneapolis led by Steven Buss and Judd Welliver. Winnetka Distribution Center is a
121,225-square-feet office/warehouse built in 1966. The property has 28’ clear height and underwent a complete interior and exterior renovation. At the time of sale, the building was 100% occupied by one tenant. The Minneapolis based team of Steven Buss, Tom Holtz, Ryan Watts and Judd Welliver focuses on the disposition of single-tenant and multi-tenant industrial and office properties. The team also advises real estate operating companies on the sourcing and structuring of joint venture equity. Steven, Tom and Ryan are part of the 85-member CBRE Institutional Properties group. In 2013, the Capital Markets enterprise of CBRE including the Institutional Properties group completed over $87.2 billion in combined total U.S. capital activity..
MARCUS & MILLICHAP ARRANGES THE SALE OF A 48-UNIT APARTMENT BUILDING Marcus & Millichap (NYSE: MMI), a leading commercial real estate invest-
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ment services firm with offices throughout the United States and Canada, today announced the sale of Calhoun Apartments, a 48-unit apartment property located in Cambridge, Minnesota, according to Craig Patterson, regional manager of the firm’s Minneapolis office. The asset sold for $2,505,000. Mox Gunderson and Dan Linnell, investment specialists in Marcus & Millichap’s Minneapolis office, had the exclusive listing to market the property on behalf of the seller, a limited liability company. The buyer, a limited liability company, was secured and represented by Evan Miller, Mox Gunderson and Dan Linnell of Marcus & Millichap’s Minneapolis office. Speaking with Mr. Linnell, “The property commanded five offers following an aggressive three week marketing campaign. There was interest from local investors as well as investors from the Twin Cities and Saint Cloud. The property ultimately closed at 99 percent of the listed price to a private investor.” News to next page
Page 26 News from previous page
Calhoun Apartments is located at 414 Calhoun Place N and 514 Calhoun Terrace in Cambridge, Minnesota. The 48unit community consisted of two 24unit buildings made up of 26 one-bedroom apartments and 22 two-bedroom apartments. The Calhoun Apartments was developed in 1978 as part of the USDA Rural Housing 515 Program; in 2009, the property had successfully exit-
People From page 4
tideas and resources to establish best practices, hosts professional education programs, and promotes the interest of the industry in political, legal and regulatory arenas. Bob brings over 23 years of business development and construction management experience and has contributed to projects totaling more than five million square feet. He has strong knowledge of every aspect of a project, from land acquisition, due diligence, conceptual design, estimating, design-build, to building commissioning. He has been a member of IACSC for ten years.
WaterStone Bank Hires New Commercial Lender in Minneapolis WaterStone Bank has hired a new vice president of commercial real estate for its commercial lending branch in Minneapolis.
Minnesota Real Estate Journal
ed the program and began renting at market rate.
Cushman & Wakefield | NorthMarq Secures Two Retail Shopping Center Transactions in Metro Cushman & Wakefield | NorthMarq represented the sale of two retail shopping centers, one in South St. Paul and the other in Eagan, Minnesota. Paul Berg joins Vice President of Commercial Real Estate Paul Muldoon at the new branch, which opened in December of 2013. Berg is an accomplished and versatile real estate executive with over 25 years of experience. He has extensive knowledge and management experience in diverse areas including commercial and residential real estate finance, development, construction, asset and property management and commercial loan securitization. Prior to joining the WaterStone team, Berg was an associate director at Marcus & Millichap Capital Corporation in Minneapolis. He also worked as a vice president and relationship manager at US Bancorp National Association and as senior vice president at Centennial Mortgage and Funding. Berg holds a Bachelor of Science degree in Business Administration from the University of Colorado-Boulder and a Master of Science degree in Real Estate Appraisal and Investment Analysis from the University of Wis-
The first is Southview Shopping Center located at 1209 Southview Blvd, South St. Paul. Knowlan’s Fresh Foods, Family Dollar and Anytime Fitness anchor this 55,000-sq.-ft. neighborhood shopping center. Leah Maurer of CWN represented the seller, Paster Enterprises/Paster Properties, and the buyer was a private capital group out of California, which represented itself during the transaction.
consin-Madison. He sits on the board of directors for the Boys & Girls Clubs of the Twin Cities, is a legislative committee co-chair for the Minnesota Shopping Center Association and is a member of the National Association of Industrial and Office Properties, Minnesota Multi-Housing Association and the Wisconsin Real Estate Alumni Association. “Paul brings extensive knowledge and experience in Commercial Real Estate lending,” said Doug Gordon, President and Chief Executive Officer of WaterStone Bank. “He is a valued asset in our growth initiatives in the Twin Cities.”
Ryan Companies US, Inc. Hires Tim Bauer as Director of Architecture, Industrial Ryan Companies US, Inc. is pleased to announce Tim Bauer has been hired as Director of Architecture, Industrial. In his new position, Tim is the point person responsible for overall design success of national industrial projects from initial planning through project completion. This responsibility includes overseeing facility planning, conceptual design, design documentation and execution, mentoring staff, leading architectural communications with customers, and supporting business development activities.
November 2014
The second is Thomas Lake Center, a 42,000-sq.-ft. shopping center, located at 1565 Cliff Road in Eagan. Tenants of the neighborhood shopping center include Ace Hardware, Cupcake, Subway, Weight Watchers and Sarpino’s Pizza, among others. Leah Maurer represented the seller Har Mar Inc. and CWN’s Skip Melin represented the buyer, a local private capital group.
“Tim is an industry thought leader in the cold storage and distribution world and brings extensive experience in distribution planning and design as well as the technical expertise we need,” said Mike Ryan, National Director of Architecture + Engineering at Ryan. “His comprehensive forethought will significantly enhance Ryan’s strategic focus in the national industrial world.” Prior to joining Ryan, Tim led the national industrial group for Leo A Daly, a multi-disciplined A/E firm located in Minneapolis. He has over 30 years of experience and has been involved in over 40 manufacturing and distribution/industrial projects throughout the U.S., ranging in construction costs from $5 million to over $300 million. He has expertise in refrigeration and low-temperature environments and has a strong understanding of new technologies and energy saving measures that are specific to those environments. Tim has been the lead on projects for such notable customers as Target Corporation, KayBee Toys, SuperValu Inc., Safeway, and United Health to name a few. “Ryan has a great reputation and amazing culture,” said Bauer. “I’m excited for the opportunity to team with people I respect and admire, and I’m ready for the challenge of expanding Ryan’s national presence in the industrial sector.”