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©2021 Real Estate Publishing Corporation October/November 2021 • VOL. 37 NO. 5 TOPICS:

The Redwell in the North Loop area of Minneapolis is an example of modern affordable multifamily housing

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Facing the challenges: The need for affordable housing and the future of office space » Regulated & Unregulated Affordable Housing; Preserving NOAH

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inneapolis and St. Paul, like most cities across the country, are still dealing with the impact of the COVID-19 pandemic. And this impact is most felt in the office market, where no one yet knows when or how companies will bring workers back to the office.

At the same time, the Twin Cities – again, like other cities across the United States – faces a lack of affordable multifamily housing. While new apartment units are being added to the region’s housing stock, much of it is high-end, unaffordable to many renters.

Turns out, the fate of the office market might have a direct impact on the stock of affordable housing. We recently spoke with Anita Kramer, senior vice president at the Urban Land Institute Center for Real Estate Economics and Capital Markets, about both the uncertainty facing OFFICE (continued on page 10)

An industrial slowdown? Not anytime soon in Minneapolis or the country

By Dan Rafter, Editor

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he industrial market was booming before COVID-19 hit. And since? It’s reached even new heights as consumers continue to flock to online shopping. Demand for new industrial space – and not just those big distribution centers – continues to rise, in the Twin Cities market and across the country.

We recently spoke with Phil Cattanach, vice president and general manager with Minneapolis-based The Opus

Group, about the new heights that industrial is reaching. Here is what he had to say.

Can you give us an overview of how strong industrial is today in the Twin Cities and the entire country?

Phil Cattanach: It’s certainly true that the industrial market has remained strong in the Twin Cities throughout the entire pandemic. But it’s been that way from a national perspective, too. Undoubtedly during this pandemic,

consumers’ reliance on ecommerce has been heightened.

It was already there. But it has been accentuated because of changing consumer behavior. In certain instances, the growing demand for online shopping was almost perpetuated by shutdown mandates at the beginning of the pandemic. Consumers lacked other options. That only bolstered the demand for ecommerce that has boosted the industrial market.

INDUSTRIAL (continued on page 12)

We design the places where great people thrive.

F ro m w i t h i n t h e 1874 H i s to r i c Washburn A Mill ruins, JLG Architects renovated a dynamic workplace with the best views of Minneapolis to create an environment where employees thrive and creativit y soars. With fresh, modern gathering spaces that ignite our collaborative culture and engage the downtown vibe below, we celebrate 32 years of building great communities.

O u r s i s a n e m p owe re d of f i c e — quintessentially Minnesota, and uniquely JLG. If you’re in the neighborhood, swing by and say hi.

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FACING THE CHALLENGES: TOO LITTLE AFFORDABLE HOUSING, TOO MANY EMPTY CUBICLES Minneapolis and St. Paul, like most cities across the country, are still dealing with the impact of the COVID-19 pandemic. And this impact is most felt in the office market, where no one yet knows when or how companies will bring workers back to the office.

AN INDUSTRIAL SLOWDOWN? NOT ANYTIME SOON IN MINNEAPOLIS The industrial market was booming before COVID-19 hit. And since? It’s reached even new heights as consumers continue to flock to online shopping. Demand for new industrial space – and not just those big distribution centers – continues to rise, in the Twin Cities market and across the country.

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JLL REPORT: GOOD NEWS AND BAD NEWS FOR A MINNEAPOLIS OFFICE MARKET FACING UNCERTAINTY For the first time in five quarters, the Minneapolis office market in the third quarter of this year posted positive absorption numbers. That doesn’t mean, though, that the office market here still doesn’t face challenges.

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JLG ARCHITECTS: FIVE ARCHITECTURAL CONCEPTS TO FAST-TRACK YOUR INVESTMENT Whether you’re scouting out new commercial property or securing the value of an existing investment, gaining architectural insight might just be the catalyst to a fiscally bright future.

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THRIVING DURING CHALLENGING TIMES: NET LEASE DOES WHAT IT’S BUILT TO DO Any fears that the net lease market would crash under the weight of the COVID-19 pandemic disappeared quickly as the sector continued to draw the dollars of investors even during the most challenging days of 2020.

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LOOKING TOWARD A BIG 2022: NO SLOWDOWN EXPECTED IN COMMERCIAL FINANCING REQUESTS Like everyone working in commercial real estate during the last 19-plus months, the financial pros in the commercial lending industry have faced plenty of challenges as the COVID-19 pandemic refuses to fade. But like others in this industry, commercial finance professionals have worked hard to overcome these challenges.

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Deluxe Corporation relocated from the suburbs to 801 Marquette, taking 95,000 square feet off the Minneapolis office market.

JLL report: Good news and bad news for a Minneapolis office market facing uncertainty

By Dan Rafter, Editor

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or the first time in five quarters, the Minneapolis office market in the third quarter of this year posted positive absorption numbers. That doesn’t mean, though, that the office market here still doesn’t face challenges.

The third quarter Minneapolis office report released in October by JLL shows that the office sector in this city has been resilient throughout the COVID-19 pandemic. But it also shows that the city and its surrounding suburbs haven’t been immune to the challenges that the entire country has faced during the last 20 months.

Jon Dahl, managing director in the Minneapolis office agency leasing group of JLL, said that the report’s findings aren’t surprising. Office markets throughout the country face uncertainty as they wait for companies to bring their workers back into the office.

It will be a little bit of slow going between now and then.”

now dropped to 50 percent or lower, Dahl said.

The COVID-19 pandemic has hit some commercial real estate sectors harder than others. The office sector, though, faces a particularly uncertain future. Many companies scuttled their plans to bring workers back to the office in September because of the rise of the Delta variant.

Many office tenants are looking at their space and, in the wake of the COVID-19 pandemic, are now saying that it no longer works for their company. These tenants, though, will need new office space if they leave their current locations. And that, Dahl said, is good news for the owners of quality Class-A buildings who do have vacancies. These tenants are more likely to move to these higher-quality buildings once they do determine their office space needs.

Now, it’s uncertain when or how many employees will return to the office buildings in downtown Minneapolis and its suburbs on a full- or part-time basis. Many companies are planning a hybrid work arrangement in which employees work part of the time from the office and the rest from home. How this impacts the office market throughout the Minneapolis area remains to be seen.

The Twin Cities market is no different.

Dahl said that the sluggish office market does present opportunity for some building owners.

“Companies are downsizing,” Dahl said.

“They are taking less square footage. That is creating some negative absorption and increasing the vacancy rate. I think that will shake out fairly quickly. I see the end of 2022 and 2023 as being rebound years.

Those owners who have a highly-amenitized Class-A office building with new vacancies now have an opportunity to attract new tenants, Dahl said. The office renewal rate in the Twin Cities market has historically been about 75 percent. It has

“Some companies will be reducing their footprint,” Dahl said. “That leaves a scenario where those companies are saving money on rent because their footprint will be smaller. They can now afford to move to a more expensive building and upgrade their office quality. These employers are trying to figure out how to get their employees into the office at least three or four days a week. Having an office space with more amenities can get people in.”

Dahl said that those office buildings that are seeing the most leasing activity in the Twin Cities market today are those that are REPORT (continued on page 21)

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JLG Architects: Five architectural concepts to fast-track your investment

By Jill Winkler, AIA, and Mike Schellin, AIA – JLG Architects

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hether you’re scouting out new commercial property or securing the value of an existing investment, gaining architectural insight might just be the catalyst to a fiscally bright future.

JLG Architects has been advising owners in the design of commercial property for the past 32 years, responding to an ever evolving and integrated design demand that isn’t slowing down. Today, business owners, employees, tenants and patrons want more from their environment - reinvented industrial design, exploration of occupant wellness, and sustainable design that will cut their carbon footprint and their operational costs, ultimately, asking for design that goes beyond the building.

JLG’s Minneapolis Office: JLG Architects renovated a 12,000-square-foot office in the raw shell of the 1874 Historic Washburn A Mill. Using sustainable building practices and the AIA Framework for Design Excellence, we reduced energy consumption and optimized natural light throughout the workplace, providing occupants well-lit workspaces and constant views of the city, park, and Stone Arch Bridge below.

JLG Architects breaks down five fundamental design concepts that could make or break your commercial investment.

Sanford Moorhead Clinic: Sanford Health of Moorhead, Minnesota, and JLG designed a state-of-the-art clinic prototype that follows a collaborative, onstage-offstage care delivery model, making visits more efficient for the providers and the patient.

The design includes 48 exam rooms organized into separate, flexible neighborhoods that each contain a procedure room and staff workspace. Within defined, efficient spaces that promote well-being, and healing, staff is given internal areas of respite with exterior views and ample daylight. Patient access is also simplified with kiosk check-ins, clear wayfinding, natural daylight, an array of provider services, and an on-site pharmacy.

“we’re creating a space that’s in tune with our human needs; access to nature, clean air and natural daylight.”

Gorecki Alumni Center: University of North Dakota’s sustainable design provides 100 percent of the center’s heating and cooling from a first-of-its-kind ground source heat pump system – saving about $38,000 in annual energy costs.

This equates to a 54 percent energy use reduction, 38 percent water use reduction and corresponding CO2 emission reductions. With a system that provides 25 percent more outside air and takes 60 percent less energy to do so, their staff has reported 15 percent more productivity with fewer sick days. Occupants and operators also love the natural light, produced with floor-to-ceiling windows, allowing a reduction of 16 percent less artificial light use.

White Bear Lake Sports Center: By renovating White Bear Lake Sports Center versus new construction, this Minnesota community saved nearly $6 million, while reducing the embodied carbon footprint through reuse of the existing building and limiting use of new materials. Their renovation included translucent panels for natural light, LED lighting, a Low-E reflective ceiling, new insulation, a metal panel roof and replacement of the ice rink’s dehumidification and refrigeration systems.

Five architectural concepts to invest in: 1. Health and Wellbeing Google ‘designing for health and wellness’ and you’ll find plenty of references that speak of striking a “harmonious balance between emotional, physical, cognitive, and spiritual wellbeing.” If you’re an investor, this probably sounds like fluff, but as an architect, it means we’re creating a space that’s in tune with our human needs; access to nature, clean air and natural daylight.

Theodore Roosevelt Presidential Library: With a sweeping architectural form that plays to the Badlands landscape, the TRPL goes beyond the set standard with deep site ecology and a more comprehensive biophilic design that will lower the total cost of ownership. The structure will make more energy than it consumes, clean the air with net positive carbon, restore the ecology of the setting, achieve water balance and renew water resources. (Photo credit Snohetta.)

If you’ve invested in an older building, chances are you probably need to start fresh, open up the floorplan and reconfigure the space to optimize natural light.

Don’t forget about upgrades to air quality

and carving out intimate areas focused on welcoming visitors, relaxation or collaboration, depending on the occupant needs.

Grand Forks Regional Water Treatment Plant: Inside the striking industrial park architecture, is a water treatment plant with a vibrant office environment, workout room, sleep rooms and locker rooms for the plant’s 24/7 staff. The wellness-driven design also includes a training room with kitchen that doubles as a social/gathering space and a balcony that provides secure outdoor access to fresh air and a gas grill.

2. Sustainable Design Whether you aim to be more environmentally responsible, or reduce long-

term operational costs, we advise all clients to pursue sustainable design and JLG (continued on page 8)

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5.

“Connecting your property’s design to the surrounding community is one of the more impactful things

Colorado College: The new Ed Robson Arena connects occupants to mountain views with strategically placed windows, provides flex space for students, optimizes the fan experience with obstruction-free bowl seating and reflects tradition with a heavily branded team suite entry, as well as a uniquely shaped locker room that emulates the CC Tiger logo.

you can do to

Gage Brothers: Gage Brothers didn’t stop at streamlining its manufacturing process of precast concrete products, the company also aimed to create a more transparent, safe and immersive work environment for their employee-owners. The new facility in Sioux Falls, South Dakota, features sit/stand workstations, natural daylighting and an open floorplan throughout – contributing to increased productivity, employee interaction and a more vibrant office culture. By reinventing the industrial workplace, the building has become a symbol of Gage Brothers’ commitment to creative collaboration and innovation, simultaneously fostering the progression of the company’s people and products.

enhance your investment.”

JLG (continued from page 6)

construction practices from the very start of the process.

Firms like JLG focus on green building system certification such as LEED (Leadership in Energy and Environmental Design) and follow the AIA Framework for Design Excellence. As an investor, you can replace artificial light with natural light and LEDs, restore the structure in the existing footprint and reuse materials. You can also choose more sustainable new or recycled materials throughout the building process.

Cities Area Transit: CAT reimagined its 1984 bus transit building, reconfiguring space to grow within a daylit, open floor plan that enhances the agency’s culture, while reducing energy use and construction cost. At the core is an immersive experience of raw steel mapping, historical graphics, and transportation signage in a circulation loop “road” design that connects departments and creates a welcoming walkway for employees and visitors.

Farmhouse Bistro: Catering to the small community of Spearfish, South Dakota, the Farmhouse Bistro pergola design elegantly connects to the region’s agrarian structures and creates a destination through indoor/outdoor dining experiences that celebrate Spearfish Creek’s unique landscape and local materials.

Keep in mind, according to the U.S. Green Building Council, LEED-certified tenant buildings command the highest rents and have lower vacancy rates, while lease-up rates typically range from average to 20% above average.

Frogtown Community Center: To connect the diverse cultures within St. Paul’s Frogtown neighborhood, JLG and St. Paul Parks & Recreation fully engaged the community in the early design stages. Together they created an inclusive community center with simplified street access and a central lobby with views of the outdoor sport fields, patio and playground space. The center provides a rooftop deck and a wide variety of super-charged fitness, activity and gathering spaces that promote wellbeing of children, teens and seniors. The center also combined construction and public arts funding for a terrazzo design and interior murals that reflect Frogtown through colorful imagery and over 30 shades of blues, greens, reds, and oranges. The high-performance facility unites a culturally and generationally diverse community, while fostering expansion of services to the surrounding communities.

3. Prioritize People Get to know your property’s occupants or patrons – they’re the key that helps determine branding, flex space, collaborative spaces and flow. If occupants work unconventional hours, what can you provide to normalize and enhance their experience?

If tenants are of a particular demographic, what amenities do they want access to?

If you have a business, map your patron’s journey from the door to the final purchase and exit – ensuring simplified wayfinding and exposure to branding, providing a sense of place along the way. An aesthetically pleasing environment is important, but it should also prioritize people and their purpose.

4. Reinvent Industrial When we say industrial, we mean that windowless steel box that houses every

civic service and dominates industrial parks across America. Although functional, they can easily be transformed with unexpected shapes, creative use of traditional materials, color and daylight via translucent panels or windows. It’s also good to remember that these dark, industrial boxes house people, people who desire an environment that is more conducive to their needs.

Connect to Community Connecting your property’s design to the surrounding community is one of the more impactful things you can do to enhance your investment. This means offering occupants a sense of place – a place that interprets and reflects the region’s culture, landscape and history within and around the building. Find out if your building can serve a higher purpose, if it’s at the center of a neighborhood disconnect and if it should pay homage to the history

of the area. Don’t forget to go outside; feel the vibe of the neighborhood, look around and explore how the exterior landscape can possibly inspire the interior.

Jill Winkler, AIA, and Mike Schellin, AIA, are principals with Minneapolis-bsed JLG Architects. For more information about the company, call 612-746-4260 or visit https:// jlgarchitects.com/.

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M I N N E S O TA R E A L E S TAT E J O U R NA L people who would normally buy into single-family housing are instead forced to look for apartments.

This places more demand on the multifamily market.

And that, again, causes monthly rents for apartment units to rise.

OFFICE (continued from page 1)

the office market and the state of affordable housing.

Our interview took place shortly after the Urban Land Institute released its 2022 Emerging Trends in Real Estate Report, which focused on both issues.

As Kramer said, a lack of affordable multifamily housing is an issue in almost every city in the United States, including in the Twin Cities market. Even lower-cost markets are seeing monthly rents rise, making it more difficult for many residents to afford an apartment unit.

The issue? A lack of supply. As Kramer says, there simply isn’t enough housing to meet the demand.

“It’s not only that there isn’t enough housing for certain income levels, but there’s also not enough housing overall,” Kramer said.

“When there’s not enough housing, it increases the prices of existing units.”

That leads to the bigger question: Why isn’t there enough multifamily housing in the country?

Kramer points to several factors. There are zoning issues. Many communities don’t want more multifamily housing. They pre-

Lake Street Dwelling offers units in Minneapolis for renters who earn lower incomes.

fer single-family homes. That constrains the supply of apartment units in many cities.

Then whatever multifamily does get built today tends to be in the high-end side of the market. That keeps most renters out of the market, Kramer said.

A shortage of single-family housing is also impacting the multifamily market, Kramer said.

“It’s true that the single-family housing market is going gangbusters today,” Kramer said.

“But there is still not enough single-family housing to meet demand.”

That means that the prices of single-family homes are rising, too. Because of this, some

“There is simply not enough housing out there to accommodate household formation,” Kramer said.

Another challenge? The cost of construction continues to rise, thanks in part to the COVID19 pandemic. There has been a significant increase on all the costs involved in construction, from labor to materials. That, too, is leading to a rise in rental costs.

Multifamily solutions Kramer did point to some solutions to this challenge. First, communities need to change their zoning to allow for more multifamily development.

Then there is technology. There is hope, Kramer said, that construction technologies and efficiencies will advance to the point that they will bring down the cost of building new multifamily developments.

Unfortunately, that hasn’t happened yet, so it’s more of a long-term than a short-term solution to the lack of affordable multifamily housing.

Local and state governments can play a role, too, by offering developers financial incentives to build multifamily housing that is affordable to those earning less.

“If people want to live closer to urban cores and to their jobs, that land is quite expensive.

So developers are starting with expensive land, a major cost,” Kramer said. “Then you add the costs of construction and you can see how expensive it can be for developers to build these projects. That is why they are saying that without some give on the part of the governments, without some sort of incentives or subsidies, it is very difficult for them to build market-rate or lower-income developments.”

There is hope, though. Kramer says that there are several developers who are skilled at putting low- and moderate-income housing projects together, taking advantage of various tax credits to do so.

“There is a segment of developers that has figured this out,” Kramer said. “These developers prove that this does work when there are strong government incentives.”

The future of office space?

Another challenge facing the Twin Cities?

All those vacant office spaces in the urban core. And it’s a problem that’s facing most major cities across the country.

Kramer said that Urban Land Institute researchers listened to nearly 2,000 senior real

OCTOBER/NOVEMBER 2021 estate professionals across the country in putting together the 2022 Emerging Trends in Real Estate Report. And when it came to the future of office space, these professionals fell into one of two mostly similar camps, Kramer said.

The extremes are those companies that say they are going 100 percent remote and those saying all their workers will return to the office. But most companies are somewhere in between.

Kramer said one group of companies says it is bringing workers back to the office. They say this is important for their company culture. Employees need to interact with each other and form relationships at work. They need to find mentors. To accomplish this, their workers will be in the office at least three or four days a week.

The other group says that remote work has been successful. The companies in this group say that they can’t deny their workers the ability to work from home and avoid long commutes into the office. They say that their workers don’t need to be in the office more than two or three days a week.

As you can see, these groups aren’t too far apart. Both types of companies are looking at bringing in workers at least part-time in the office, while letting them work remotely on other days.

“We believe what the real estate professionals are telling us: The hybrid work model is here to stay,” Kramer said. “How it plays out, though, will be very interesting. There is such a full range of companies that is considering this model. There’s a recognition, too, that with a tight labor market workers and employees might be more in the driver’s seat today. They might want that hybrid model. Companies might need to offer it to attract the best talent.”

Office space might change because of this trend. The office might now be a space where people come to collaborate while they handle their more heads-down type of work remotely, Kramer said.

In terms of the office buildings themselves, there’s already been a flight to quality, Kramer said. Many companies are moving to higher-quality office buildings with better ventilation and other amenities. This could lead to a bifurcation in the office market: Newer, higher-quality office buildings will continue to attract tenants while older office space steadily grows obsolete.

As Kramer said, this connects to the housing market. Will developers transform those older office buildings into multifamily housing? And if they do, how will that impact the stock of affordable apartment units?

“Office has this new demand factor that wasn’t there before the pandemic,” Kramer said. “There isn’t going to be an abrupt change, but as companies get closer to making long-term decisions, we’ll see how it affects the overall office demand. Companies still need their office space. But how they use that space will change.”

MINNEAPOLIS • DENVER • FARGO

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INDUSTRIAL (continued from page 1)

And this goes beyond just the large-scale distribution facilities that people equate with ecommerce. It goes through the entire supply chain, from the distribution of goods to the sorting facilities to the lastmile facilities and all the other different manifestations the supply chain takes.

And demand for industrial space hasn’t let up yet, right?

Cattanach: To a large degree this is still unfolding with the continued pressures throughout the supply chain. Organizations, particularly in the manufacturing arena, are trying to create some additional capacity for resiliency throughout their supply chain. Groups are taking on additional space. The just-in-time model has not been as resilient as we had hoped when there are supply chain disruptions.

Just look at a recent example, the jam in the Suez Canal. That created global supply chain challenges during a handful of weeks. Then you look at the Port of Long Beach to see the congestion there, all the ships stacked up. Some of the larger retailers are hoping to have their goods ready to be delivered for the holidays. That stuff, all those goods, have to go somewhere. This is all placing additional demands on the industrial supply.

The Opus Group’s Arbor Lakes Corporate Center in Maple Grove, Minnesota.

There is tremendous demand on the existing industrial supply. The demand for industrial space has accelerated because of the way consumers are getting their goods today.

What about manufacturing? Are we seeing an increase in demand for more manufacturing space, too?

Cattanach: We are seeing manufacturing groups that recognize that they need to grow within their space. Some of this started many years ago. You’ll see a manufacturer watch as demand for their business grows. They haven’t had a chance, though, to step back and look at the long-term trajectory of their business. It’s more difficult to pick up a manufacturing business and relocate it. The more sophisticated the manufacturing process is, the more challenging it can be to relocate it.

You can’t pick up a manufacturing process and relocate it in a day. You almost have to phase the process so that you don’t lose 60, 90 or 120 days of business. You need built-in resiliency. We did a manufacturing facility that was creating a line of plumbing testing parts. They had been in their space for close to 60 years. It was a big transition for them to go to a new facility, one that was two times the size of their existing facility.

They were moving for the long haul. They weren’t thinking just 10 to 15 years down the road. They were looking at the longterm future of their business. For businesses in this situation, if they have two lines of production, they have to almost shut down one line, move it to the new facility and have it up and running before they move the other line over. Otherwise, they’ll be out of inventory.

Opus developed, designed and built the 130,000-square-foot spec Golden Triangle Corporate Center in Eden Prairie, Minnesota.

So, yes, demand for manufacturing space is high, too. But businesses must heavily plan out their moves.

What about attracting new talent? Does new industrial space help companies attract workers?

Cattanach: There is a war for talent today.

Companies are also working on attracting and retaining top talent. The physical space in which their employees work can make a difference. New industrial spaces bring in more daylight, have higher clear spaces and better air exchange. It is a more enjoyable experience to work in a building like this. That is a differentiator, especially with the ever-tightening labor market.

One of the more enjoyable things we get to experience as developers is when we move a client into a new space. Businesses have so much apprehension about that change.

A lot of the businesses realize they need to move. But they have a fear of change. When they do get into their new space, after a month or so, it is almost without fail that when we meet with them they tell us, ‘Why didn’t we do this 20 years ago?’ People are excited to come into work. Recruiting has gone up. They see the benefits of that new space.

What about spec industrial space? Is Opus building more spec industrial?

And are there any worries about filling this space?

Cattanach: We at Opus have been an active player in the speculative space. Five years ago, there was a little more balance in terms of spec vs. build-to-suit for our industrial product lines. It was never at 50/50, but depending on the year, it was usually about 60/40 between spec and build-to-suit. Today, we are probably closer to 80 percent or 90 percent building on a spec basis.

The most significant driver of that are the supply chain challenges. The critical components of an industrial building, the pre-cast, steel and roofing equipment, are taking longer to get today. That ends up forcing us toward more spec development.

A lot of companies don’t have the luxury to

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call up and say they need space and they need it a year from now. If you call today, we might not have the ability to deliver your new industrial space to you in a year.

We can’t get the materials we need to build it in a year. That has pushed a lot of developers to spec space because of those pinch points in the supply chain for delivering new buildings. If you don’t have inventory, you almost aren’t in the game right now.

The other part of this is that companies need space so quickly today. They are forced to look toward existing spec space instead of contemplating a build-to-suit now because of the lead times. When doing spec projects, it was not commonplace to have a lot of pre-leasing done with spec projects. In a true spec scenario, we were usually breaking ground and putting up a building without having any signed leases in place. Now, it is more common that you are at least in negotiations with possible tenants when starting construction. The stabilization of industrial spec projects is happening on a much shorter timeline than we saw several years ago.

Has COVID-19 accelerated many of these trends?

Cattanach: Prior to the pandemic, the Twin Cities market by and large was not a heavy distribution market. The size of the average building that was new, a big building for the Twin Cities, was a quarter million square feet. Today, as we look at the demands and space needs from companies, the large-format buildings are now in demand. When I say large-format,

Opus developed, designed and built the 130,000-square-foot spec Golden Triangle Corporate Center in Eden Prairie, Minnesota.

I am talking half-a-million square feet to 1 million square feet. Companies need that larger format to build up supply chain capabilities to serve the population of the greater Twin Cities market.

At the same time, COVID has forced other end users to work to catch up to Amazon.

Household names such as Walmart, Target and Home Depot are all aggressively growing their distribution networks throughout the United States. The Twin Cities market is no exception.

When tenants are looking for new industrial space, what features and amenities are they looking for?

Cattanach: Tenants are looking for a higher amount of natural daylight coming into their spaces. We achieve that through heavier glass lines. We paint walls of the interior white to get more light. We’ve also seen a demand for outdoor patio or seating areas. The new spaces we are building for tenants are incorporating large training, cafeteria and break room areas to create

a more welcoming environment for their workers.

What the users want and what municipalities want are handsome-looking or snappy designs that are appealing to the end user.

They want to see a more corporate image instead of a big gray box that some incorrectly generalize industrial as being. We’ll add glass curtain walls at the corners of a building. We’ll highlight entrance areas to accentuate that new corporate image that a lot of users are looking for.

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M I N N E S O TA R E A L E S TAT E J O U R NA L

14

OCTOBER/NOVEMBER 2021

Net lease does what it’s built to do: Thriving during challenging times

By Dan Rafter, Editor

Both Walgreens and dollar stores are popular net lease assets today.

A

ny fears that the net lease market would crash under the weight of the COVID-19 pandemic disappeared quickly as the sector continued to draw the dollars of investors even during the most challenging days of 2020.

COVID-19 pandemic. This represented a significant difference from the Great Recession in 2008. Back then, lenders pulled back. During COVID, though, lenders were still willing to loan money to investors and developers.

And today? Net lease assets remain one of the most attractive options for investors. And those working in this field say they see few signs that this will change.

Then there’s the nature of net lease assets itself. Unlike other forms of real estate, net lease properties mostly run themselves. That makes them more attractive to investors who aren’t interested in hiring property managers or managing a property themselves.

BJ Feller, managing director and partner with the Chicago office of Stan Johnson Company, said he saw just a brief pause in net lease activity during the earliest months of the pandemic.

But after June of last year? Investors again returned to net lease assets, he said.

“There was a moment of uncertainty when investors didn’t know how everything would play out,” Feller said. “But then in the summer of 2020, net lease assets saw this incredible rebound of activity. It has since been incredibly robust for all of the net lease commercial assets.”

Why did activity rebound so quickly in the net lease market? Feller points to several factors. First, there was a dramatic pullback in Treasury rates. Rates that were once north of 2 percent suddenly dipped to less than 1 percent.

At the same time, lenders remained active even during the height of the

“Net lease gives you the chance to get into real estate, with its returns and tax benefits, without having to be this active manager,” Feller said. “That’s what people like about net lease. As the Baby Boomers age, they are realizing that net lease real estate is a good investment for the later third of their lives.”

Mark West, senior managing director for net lease in the Dallas office of JLL, focuses on net lease assets across the country. He said that this market has been active throughout the last 19-plus months.

Why? West said that net lease assets are easier ones for investors to take on.

“They are very passive investments,” West said. “They don’t require a lot of landlord responsibility, if any at all. They pay reoccurring dividends, which is very

nice. In uncertain times, these are very attractive assets. They are passive, longterm investments, much like a bond, but you have a hard asset with very durable income.”

Randy Blankstein, president of The Boulder Group in Wilmette, Illinois, agreed that the net lease sector is on a hot streak now. Part of the reason? The market at the end of the third quarter was seeing historically low cap rates.

“Activity has been picking up as the year has gone on,” Blankstein said. “This is a market that is searching for yield. Investors are looking for safe, high-yield assets. Net lease is very much in vogue this year. This market has done extremely well. Volume has been really strong.”

Different sectors, different results As Blankstein says, net lease assets during the pandemic did exactly what they were supposed to do: They yielded a steady return for investors.

“Volume was down tremendously in the second quarter of last year,” Blankstein said. “But since then, month by month, quarter by quarter, the volume has picked up since that date. We are now in a very robust market.”

But in little surprise, investors are focusing on the best-performing net lease assets, Blankstein said.

Not all net lease assets are performing equally today. Industrial and multifamily remain the favored classes for investors.

It’s little surprise that industrial is performing so well. Even before the pandemic hit, customers were spending more of their shopping time online. And when they ordered products from Amazon or other online retailers, they wanted them to show up at their doors in fewer days.

That led to pressure on companies to open a greater number of warehouses across the country, something that has led to demand soaring in the industrial market. The pandemic has only boosted the public’s appetite for online shopping.

“The pandemic took trends that were probably going to take three to five years to play out and accelerated them,” Feller said. “We saw probably 60 months of change and progress happening in 12 months. People were already bullish on industrial. The pandemic transformed industrial from Miss America to Miss Universe.”

Stephen Wolff, vice president for industrial at Dallas-based Spirit Realty, said that all types of industrial have been strong performers since the start of, and before, the pandemic.

“There is a lot of demand across the board,” Wolff said. “It’s not just Amazon

OCTOBER/NOVEMBER 2021

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15

distribution facilities. Light manufacturing is in demand. Heavy manufacturing is seeing more demand than it has in years. Cold storage is a very active sector. Across all food groups, industrial is doing well.”

Wolff doesn’t see this demand lessening anytime soon. The pandemic has changed the way people shop, travel and socialize. These changes aren’t disappearing, he said.

“This is the world we live in now,” Wolff said. “This is the new norm. There is no end date when we go back to normal.

Real estate is included in that.”

This always rising demand for industrial product has posed challenges for companies like Spirit Realty. Wolff said that with demand so high and cap rates so compressed, it can be difficult for investors to acquire properties with all the competition in the market.

How is Spirit Realty dealing with this?

Wolff said it takes a lot of work.

“We are fighting it out with everyone else,” he said. “If a broker has an opportunity to show something off-market, if brokers have the opportunity to show a property to six or seven of their best relationships, we get those calls. I have great relationships in the market. The

Quick-service restaurants with drive-throughs remain popular in the net lease sector.

certainty of close with Spirit Realty is very high.”

online, from food and medication to clothes and school supplies.

Wolff said that consumers have gotten comfortable with buying everything

“You might have distributors of consumer products that are working in a 100,000-square-foot warehouse. The

demand for their product might have soared 20 percent or 30 percent during the pandemic,” Wolff said. “Suddenly, they need more space for distribution.

NET LEASE (continued on page 16)

16

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OCTOBER/NOVEMBER 2021

NET LEASE (continued from page 15)

They are now out in the market looking. Everyone is still buying things, but they’re doing it differently.”

Steady in multifamily The multifamily asset class has remained attractive to investors, too. When the pandemic started, the fear was that renters would stop paying their monthly rents. For the most part, that hasn’t happened.

People have to live somewhere. This meant that for many, paying their apartment rent remained a priority, even during the pandemic.

“Anywhere where people could do their jobs from home, we saw very little in missed rent payments,” Feller said.

“That was the great line of demarcation when it came to the economic impact of the pandemic, people who could work from home and those who couldn’t. The disruption was not as severe as anyone thought it would be for multifamily.”

Blankstein said that investors are focusing on better products today. That means industrial, of course. But it also means retailers that were deemed essential throughout the pandemic, such as Walgreens, Target and Walmart.

Quick-service restaurants with drivethroughs, too, have performed well throughout the last 19-plus months, and these assets continue to attract investors.

“People are focused on tenants that are expanding,” Blankstein said. “Everyone understands how well McDonald’s and Chick-fil-A have done during the pandemic. The quick-service restaurant with a drive-through looks to be the future.

If you want a quick-service restaurant today you need a drive-through or a double drive-through.”

This trend might increase movement in the net lease space. Blankstein said that quick-service tenants locked into strip centers are eager to move to new locations that allow them to add drivethrough service. Blankstein pointed to restaurants such as Panera and Dunkin’ that are now looking to increase their free-standing locations. Spots inside strip centers are no longer as attractive to these restaurants.

“People adjusted during the pandemic,” Blankstein said. “They want drivethrough service. Many of the changes in consumer behavior during the pandemic are going to stick around.”

Dollar stores, too, are an attractive option for investors, Blankstein said.

These retailers, mostly serving more rural communities, have thrived during the pandemic largely because they give consumers the chance to get in and out quickly. As Blankstein said, when you need a few items on the way home from

Net lease pros expect dollar stores to remain attractive investments in the net lease sector.

“It’s undeniable

“People are realizing that this is a fiveyear story, potentially even longer,” Feller said.

business world

Feller said that public transit might be the biggest differentiator when it comes to office markets. Those office markets in which most people commute to work via public transportation might take longer to recover than those in which more people drive to work, he said.

is not going to

West, though, said that he is seeing a slow but steady rebound in the office market today.

work from home

“The farther we get away from the start of the pandemic and the closer we get to our normal work environment, the closer to normal you see the office market becoming,” West said. “You are starting to see office building occupancies creeping up. In the net lease space, you have long-term net leases. So these assets are going to be desirable because there is no leasing risk.”

that the whole

forever.” work, you’d rather run into a Family Dollar than a busy Walmart.

Dollar stores are also a bargain for new investors. They’re a way for investors to get into the net lease market without spending the type of money it’d take to purchase a multifamily building or industrial property.

Facing the challenges Other net lease sectors, though, are facing challenges. Plenty of uncertainty plagues the office market, for instance, as it’s unknown when companies will start bringing their employees back to the office.

And when employees do return, who knows how many will work full-time in the office? Many companies are contemplating hybrid work schedules in which their employees spend time every week working remotely.

Of course, not every city is seeing workers returning to offices at the same rate.

West said that cities such as New York City and San Francisco are not reopening quite as fast as others. Offices in these cities, then, might not return to normalcy as soon.

“But it’s undeniable that the whole business world is not going to work from home forever,” West said.

Then there is retail. Feller said that much of the physical retail market already went through the pain associated with ecommerce long before the COVID-19 pandemic hit. Retailers already knew that they had to operate both in the physical and online spaces, taking an omnichannel approach, to be successful.

“People think of retail as being either online or brick-and-mortar,” Feller said.

“But retailers know they have to operate in both environments.”

A bright future?

Why has the net lease sector been so resilient during COVID? Blankstein said that net lease assets typically feature stronger, more successful tenants. These tenants are built to perform better even during challenging times.

“You have tenants like the Apple Store and Lululemon. These are high-volume destination retailers,” Blankstein said.

“For the most part, it’s not the nail salons and dry cleaners. Net lease has better tenants to begin with. Those better tenants have outperformed the smaller ones during COVID in general.”

And what does the future hold for industrial? This sector is due for a slowdown, right?

Wolff isn’t so sure when that might happen. The sector’s hot streak is unprecedented.

“We are now on an eight-year or nineyear bull run with industrial. It’s unlike anything I’ve ever seen,” Wolff said.

“Generally, you see a fall-off and change in the market for 12 to 18 months every five to seven years. I have to think the industrial market will level off eventually.

When that happens? I don’t know.”

West agreed that the future looks bright for net lease. He said that real estate in general has performed well even during the pandemic. West said that even the hospitality sector is performing better today.

“If the economy is strong and headed in the right direction, that is good news for real estate,” West said. “Real estate houses the economy. There is always a need for real estate. We are bullish on the future when it comes to real estate. Things are trending in a positive direction.”

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M I N N E S O TA R E A L E S TAT E J O U R NA L

OCTOBER/NOVEMBER 2021

Looking toward a big 2022: No slowdown expected in commercial financing requests

By Dan Rafter, Editor

L

ike everyone working in commercial real estate during the last 19-plus months, the financial pros in the commercial lending industry have faced plenty of challenges as the COVID-19 pandemic refuses to fade.

But like others in this industry, commercial finance professionals have worked hard to overcome these challenges.

What has the last year-and-a-half-plus been like for the commercial finance industry? Minnesota Real Estate Journal recently spoke with Jim Doyle, executive vice president in the Cleveland office of Bellwether Enterprise, and Joseph Platt, senior vice president with the Kansas City, Missouri, office of Grandbridge, to find out.

Doyle and Platt both said that the industry has faced struggles throughout the pandemic. But they also said that it has been surprisingly resilient, too.

“Things feel more like normal today,” Doyle said. “When we were sitting back

“After everything unlocked again, we have been very pleased with the overall production we’ve seen during the last 16 or 17 months.” and staring the pandemic in the face last April, May and even June, there were real concerns about where the commercial real estate market would be. There were worries about whether lenders would be willing to lend. Fortunately, that dissipated quickly.”

Platt said that any slowdown in financing requests after the start of the pandemic was short-lived.

“Many lenders did retreat to the sidelines at the beginning,” Platt said. “There was probably a two- to four-month period, depending on which lender you were talking with, when lenders took a pause.

But after that initial period when things were locked up and frozen, we have been very fortunate. After everything unlocked again, we have been very pleased with the overall production we’ve seen during the last 16 or 17 months.”

Platt said that there remains a strong appetite for commercial mortgages through Fannie Mae, Freddie Mac and life insurance companies. The CMBS market remains a viable option, too, he said.

“I wouldn’t say we’ve seen a rise in business, but our business has been very strong and steady since mid-summer of 2020,” Platt said. “Interest rates are still holding steady and we have seen credit spread yields that are also quite attractive. That is a sign of a competitive market.”

A robust lending environment Today, Doyle said, the lending market remains robust, led by Freddie Mac and Fannie Mae on the multifamily side. But it’s not just Fannie and Freddie that are active. Doyle said that life insurance companies and bridge lenders, which did FINANCING (continued on page 20)

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drop out of the market during the earliest days of the pandemic, have returned and are now being aggressive with their pricing and terms.

M I N N E S O TA R E A L E S TAT E J O U R NA L

“There is so much capital in the market on the buy side, and there are few

That’s good news. But it doesn’t mean that there aren’t challenge in today’s lending market. One of the biggest?

Doyle says that all these lenders are chasing the same types of deals: multifamily and industrial transactions.

greater alternatives to get returns

That means that financing for other deals can be trickier to find.

Multifamily is still in a very good place.”

“We have never seen on the sales side cap rates being bid down this aggressively both on multifamily and industrial,” Doyle said.

Two booming asset classes It’s not surprising that industrial and multifamily are attracting the most attention from lenders.

On the industrial side, consumers continue to flock to the Internet to buy everything from electronics and toys to groceries, sporting goods and cleaning supplies. The pandemic has only boosted the rise of online shopping.

“Apartments and industrial are getting most of the love right now,” Platt said.

“Apartments have remained the darling asset class. And industrial is doing so well because consumers have changed the way they shop, turning to online shopping more often. When it comes to acquisition financing, the majority we are seeing today is in the apartment and industrial space, with office and retail, probably in that order, third and fourth.”

And as this trend continues, it’s forcing companies to open new distribution centers and warehouses across the country.

The developers building these facilities need money to fund their projects.

“Everyone is delivering products quicker and quicker,” Doyle said. “People want their products delivered overnight. Because of this, the distribution market has taken off. COVID helped fast-forward that. People have been home and they are getting everything delivered to them, from groceries to whatever else they need from Amazon. There has been such incredible growth in the distribution market.”

The multifamily sector has benefitted from outside forces, too. First, renters have largely paid their monthly rents on time throughout the pandemic. That has helped the multifamily sector remain strong throughout the last 19-plus months.

Secondly, the costs of single-family homes continue to rise. This has priced many would-be owners out of the market. Instead of buying a home, then, these people are continuing to rent. This,

right now then the multifamily market.

too, has boosted the strength of the multifamily market.

“There is so much capital in the market on the buy side, and there are few greater alternatives to get returns right now then the multifamily market,” Doyle said.

“Multifamily is still in a very good place.”

A disciplined industry Doyle said that despite the struggles some commercial sectors face, Bellwether Enterprise is still seeing a wide variety of deals. That includes some office and retail financings.

But lenders working in those asset classes hit harder by COVID are requiring more of borrowers, Doyle said.

“We see lower loan-to-value ratios and more conservative deals from lenders willing to do office and retail today,” Doyle said. “In the hotel space, you are paying a higher price in rate and you will see conservative terms. You will see much more conservative terms from lenders willing to lend and invest in those asset classes.”

Platt agreed. He said that lenders are disciplined today and are making sure not to make risky decisions during the pandemic.

“Just because capital is available today doesn’t mean that we are back to the early 2000s underwriting where people were basing decisions on a pro forma basis or that lenders are offering a whole menu of interest-only options,” Platt said. “The lending and credit environment is very disciplined today. None of the lenders we work with are acting in a haphazard way. Everyone is being smart, even though this lending environment is fast and competitive.”

Platt did say that Grandbridge is seeing a rise in refinance activity. This makes sense because of the high number of 10-year loans that borrowers took on in 2010, 2011 and 2012. Those loans are now reaching their maturity, so it’s not surprising that refi activity is increasing.

The hotel sector is an especially interesting one today. As Doyle said, leisure

travelers have largely returned, helping hotels fill more rooms throughout the summer. But many hotels rely on business travelers, and business travel has not yet returned. And there’s little indication that companies will be sending their employees on the road again anytime soon.

“It’s tough to pinpoint when business travel will come back and to what extent,” Doyle said. “Are we going to be on the road as often as we were previously?

Or have Zoom calls and Microsoft Teams calls replaced some of that?”

The office sector faces some of the same uncertainty, and that makes lenders a bit more wary when debating whether to finance deals in this space.

As Doyle says, it’s too early to know whether companies will embrace flexible work schedules that allow employees to work from home several days a week. If they do, will these companies need as much office space? And will the owners of office towers and campuses struggle, then, to find tenants?

“Lenders do think it’s again too early to know what the answers to these questions will be,” Doyle said. “Many companies still have several years left on their office leases. We aren’t going to see big changes in office space overnight. But ultimately, will companies shrink their office footprints?”

Despite the challenges, Doyle says, it has been mostly business as usual in the commercial lending business for life insurance companies, banks and CMBS lenders. As Doyle says, lenders are looking and hungry for deals.

But what do companies such as Bellwether and Grandbridge look at when considering whether financing deals make sense?

Not surprisingly, COVID-19 is playing a role. Lenders want to know how a particular property performed during the pandemic before they close a financing deal.

“One question that gets asked today is ‘How has the property been affected during COVID, if at all?’” Doyle said.

OCTOBER/NOVEMBER 2021 Lenders who are looking at a multifamily deal will ask if all the apartment building’s renters have been paying their monthly rents on time. If it’s a retail deal, they might ask whether owners had to give concessions to keep tenants in place and if all these tenants are current on their rents. If it’s office, they’ll ask when tenants are bringing employees back.

“These are issues we never had to deal with before,” Doyle said. “But these are questions borrowers will have to know the answers to. Outside of that, it’s still core real estate principals.”

Platt said that sponsorship and the cashflow of properties are key.

“At the end of the day, lenders want to know that a company has good, experienced people operating, managing and owning the property,” Platt said. “But equal to that is the need for strong, stable cash flows in the event that there are some challenges downstream.”

A peek into the future And what does Doyle expect to see in the commercial lending business during the next several months and into 2022? He’s predicting steady business.

Some owners, for instance, are considering selling now because they fear changes are coming to the way capital gains will be taxed. Because of this, they are eager to sell before the end of the year.

But otherwise, Doyle says, lending requests should continue to come in at a steady pace.

“As long as interest rates stay where they are and all other things being equal, real estate should still bring strong returns to investors,” Doyle said. “The returns on real estate should still be better than what investors can get with bonds or stocks.

Because of this, real estate attracts a lot of capital. That will continue to drive the market. We are still very active. We don’t see that changing going into early next year.”

Platt said, too, that he expects demand for commercial financing to remain steady throughout 2021 and into next year.

“With rates as low as they are and with the amount of capital that is hungry to find deals, I do think demand will be steady,” Platt said. “When investors are looking at commercial assets versus other investment opportunities, commercial real estate looks like a good relative value. The yields are still very attractive.

And all the while, you get a tangible asset when you invest in commercial real estate. If we have made it through the pandemic and a fairly volatile election year without demand dropping, it is our view that both debt and equity capital are abundant enough to fuel this steady amount of business we are seeing.”

OCTOBER/NOVEMBER 2021 REPORT (continued from page 4)

of the highest quality and charging some of the highest rents.

“We have had an amenities arms race for a few years,” Dahl said. “This is even a bigger opportunity for landlords to upgrade their buildings. It’s not just amenities such as tenant lounges or fitness centers. Air quality is a big one because of COVID. What kind of air filters do you have? What is the air exchange rate? What other COVID mitigation things are landlords doing? People might move their companies because of those features.”

According to JLL’s report, two big new occupiers that moved into the Minneapolis CBD helped move the market into positive absorption during the third quarter.

Deluxe Corporation relocated from the suburbs to 801 Marquette, taking 95,000 square feet off the market. And Life Time Work moved into Thirty, the converted YMCA building on the west end of the Minneapolis CBD, filling 53,000 square feet. These two moves accounted for the bulk of the positive office absorption during the third quarter.

In another big move, three of the four buildings in the Metropoint office campus in St. Louis Park, Minnesota, sold in July for $63.5 million to ABS Management. Other

M I N N E S O TA R E A L E S TAT E J O U R NA L than Thrivent’s $130 million sale-leaseback of its headquarters in February, the Metropoint sale was the largest office trade in 2021 so far.

Seasons hotel and condominiums. This in addition to the 531,000 square feet of office space. Fortunately, the majority of this office space is already pre-leased.

Overall, the total vacancy rate for the Minneapolis office market stood at 18 percent for the third quarter, according to JLL. At the same time, 531,419 square feet of new office space was under construction.

The big question, of course, is when will companies in the Twin Cities bring their workers back to the office?

The average direct asking rent for office space in this market fell a bit to $28.65 a square foot, while the average sublease asking rent was $25.86 a square foot.

For the year of 2021 so far, net absorption in the Minneapolis office market was negative 819,134 square feet.

What does the future hold? No one knows for sure, but big office deals are on the horizon. JLL pointed to Target as an example.

In the first quarter of 2021, Target announced plans to sublease its City Center site in the Minneapolis CBD. That will make Target the biggest sublessor in the country when its 890,000 square feet of office space is officially listed, something that is likely to happen in the fourth quarter of this year.

The next major office delivery will be RBC Gateway in early 2022. This Minneapolis CBD development anchoring the east end of Nicollet Avenue will also include a Four

Dahl said that no one has the answer to this question. But different types of companies, such as law firms and professional services firms, are already seeing higher occupancy rates than others.

“If you talk to senior level people at large organizations, they’ll tell you that they still don’t know when their employees will be back,” Dahl said. “Some are testing permanent work-from-home. Others are testing hybrid work environments. Others are saying they expect their employees to be back in the office five days a week. Everyone is still feeling it out.”

Dahl said that work-from-home does come with certain negatives. Maybe a company has hired interns. Who, Dahl asks, is mentoring these interns if they can’t speak to anyone face-to-face?

Office occupancy rates might be a bit higher in the suburbs than they are in the downtown Twin Cities market, Dahl said.

“When COVID hit and after the George Floyd incident and the resulting civil un-

21 rest, all activity dropped off in downtown,” Dahl said. “That lasted for a while. We saw more activity in the suburbs. There was a lot of talk of downtown companies moving out to the suburbs. There were a few and there are still a few kicking around that idea. But downtown, coming into the summer months, it was like a cork came off the bottle. There was tons of activity.

Our office showing activity in the summer months was higher than it was in 2017, 2018 or 2019. People can only delay their office leasing decisions for so long.”

When will companies finally start making longer-term office decisions? Dahl said that some office end users are already at this point.

Some companies are asking for one-year extensions of their office leases, Dahl said.

But most landlords and owners aren’t accommodating these requests.

“Normally, we don’t do those one-year extensions. But because of what was going on at the time, owners were more accommodating to those tenants,” Dahl said. “Now, owners are pushing back against anyone asking for a one-year extension. They are requiring a three- to five-year minimum.

We have seen lots of long-term leasing in the last six months. I am feeling much better about this market today. I was wondering if 2021 was going to be a total wash.

Instead, it’s turning out to be a better year than we expected.”

Minnesota Real Estate Hall of Fame is BACK Breakfast, Hall of Fame Induction, Continuing Education Credit Wednesday, November 10, 2021, 7:30 a.m. – 10:00 a.m.

Golden Valley Country Club 7001 Golden Valley Rd, Golden Valley, MN 55427

Registration - $35

Register at mn_real_estate.eventbrite.com or call, 612-720-3079 The University of St. Thomas Shenehon Center for Real Estate will induct the late Herb Tousley, who led the University of St. Thomas' nationally renowned real estate program from 2009 until his death in January 2020.

The breakfast program will feature a panel of five local experts who will discuss the Real Estate Outlook for 2022. One hour of continuing education will be offered to real estate professionals who register for credit at the event. Continuing Education has been applied for and one hour is pending from the Minnesota Department of Commerce.

The Real Estate Outlook for 2022 panel, will include: • Stuart Ackerberg, CEO, The Ackerberg Group • Tim Murnane, President and CEO Opus Holding, LLC • Mike Ohmes, Managing Principal, Cushman & Wakefield • Jeff Schoenwetter, CEO and Chairman, JMS Companies • Scott Tankenoff, Managing Partner, Hillcrest Development, LLLP

Register at mn_real_estate.eventbrite.com or call 612-720-3079

TOPICS: » Affordable Housing: Current State of the Market » Capital Markets Strategies, Solutions, and Trends » Regulated & Unregulated Affordable Housing; Preserving NOAH

SPEAKERS: Angela Christy Faegre Drinker

Jeff Von Feldt Duffy Development

Paul Connolly R4 Capital

Anne Mavity Minnesota Housing Partnership

John Errigo Greater Minnesota Housing Fund

Peter McLaughlin LISC Twin Cities

Becky Landon Landon Group

Karly Schoeman Washington County

Chris Palkowitsch BKV Group

Katie Anthony Schafer Richardson

Steve Minn Lupe Development Partners

Chris Sherman Sherman & Associates

Michael Byrd WNC & Associates

Thomas O’Neil Colliers Mortgage

Sarah Harris AEON

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