VOLUME 31, NUMBER 08
©2015 Law Bulletin Publishing Co.
August 2015
What do investors love? Strip centers anchored by grocery stores … still
By Dan Rafter, Editor
S
tability. That’s the word Joe Girardi uses when talking about the retail strip centers across the Midwest that are anchored by a Trader Joe’s, Whole Foods Market, Meijer or other grocery stores. These are the retail centers that investors most eagerly target, Girardi says. And he should know. Girardi, principal with Mid-America Real Estate Corporation, recently led the investment sales team that brokered the sale of Heritage Commons in Lakeville, Minnesota. Austin, Texas-based Epic Real Estate Partners purchased the 138,690-squarefoot grocery-anchored neighborhood center in the Minneapolis market earlier this year. Though the center includes tenants such as Subway, Papa Murphy’s
and Great Clips, the real star of the deal was the Cub Foods grocery store that anchors the center. Why? Investors know that grocery stores are one of the safest businesses in the United States. In bad economic times, consumers might pass on the take-out pizza or the expensive haircut. But they’ll always need to eat. They’ll always, then, need to shop at their local grocery store. “Grocery-anchored shopping centers have always had much more stability than your typical multi-tenanted shopping centers,” Girardi said. “The grocery stores tend to do better in economic recessions, and that is something that appeals to risk-averse investors.” The numbers back up Girardi. Real Capital Analytics says that about $12.8 billion worth of grocery-anchored retail centers were sold in 2014. That is a jump of 34.6 percent from 2013. Grocery to page 18
The Midwest rolls out the welcome mat: Hotel sales, development on the rise By Dan Rafter, Editor
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ow hot is the hotel industry across the Midwest? Just ask Ronn Thomas, senior director of brokerage services with Cushman & Wakefield|NorthMarq in Minneapolis. This CRE pro in the past 15 months has helped close six hotel transactions for his clients. These sales have stretched from Rochester, Min-
nesota, to New Richmond, Wisconsin. In 2015 alone, Thomas has closed three hotels transactions. And the market is showing no signs of slowing. Thomas already and has additional properties under contract as he works closely with clients including Kelly Inns, Titan Development & Investments, InterMountain Hotels and Marriott. Thomas says that there’s no secret to the increase in business. It’s all about the economy. “The economy is strong, so hotels will follow that,”
Thomas said. “People are traveling. Businesses are sending their employees out into the field again. People are taking family vacations. Because of this, the hotels are doing well.” Thomas points to his own market, Minneapolis/St. Paul. He says that a handful of new hotel projects are in the planning stage or under construction, with some ready to open in the next several months. Hotels to page 19
August 2015
Minnesota Real Estate Journal
Contents
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AUGUST 2015 • VOLUME 31, NUMBER 08
WHAT DO INVESTORS LOVE? STRIP CENTERS ANCHORED BY GROCERY STORES … STILL THE MIDWEST ROLLS OUT THE WELCOME MAT: HOTEL SALES, DEVELOPMENT ON THE RISE
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AFFORDABLE HOUSING ADVOCATES DISCUSS NEED FOR SPECIALIZED HOUSING OPTIONS AT 2015 AFFORDABLE HOUSING SUMMIT
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CUSHMAN & WAKEFIELD|NORTHMARQ: COMMERCIAL REAL ESTATE MARKET SIZZLING IN THE TWIN CITIES
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HOW MUCH DAMAGE CAN A TENANT FROM HELL REALLY UNLEASH?
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CITY, COUNTY OFFICIALS LIKE WHAT THEY SEE IN URBANWORKS’ VISION FOR THE ‘WEST LOOP’
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Departments PEOPLE
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NEWS
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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. ©2015 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
August 2015
People a division of Law Bulletin Publishing Co.
Larkin Hoffman Welcomes James Godwin, Rick Dold 13400 15th Ave North, Suite C Plymouth MN 55441 For information call 952-885-0815
Publisher | Managing Editor Jeff Johnson jjohnson@rejournals.com Associate Publisher Jay Kodytek jkodytek@rejournals.com Consulting Editor Dr. Tom Musil tamusil@stthomas.edu Conference Manager Alan Davis adavis@recg.com
EDITORIAL ADVISORY BOARD JOHN ALLEN Industrial Equities ROBERT ANGLESON Navigator Real Estate RICK COLLINS Ryan Cos. US Inc. JEFF EATON Cushman & Wakefield/NorthMarq
Larkin Hoffman is pleased to announce that James Godwin and Rick Dold have joined the firm. They come to Larkin Hoffman from the Rochesterbased law firm they founded together, Godwin Dold. Both attorneys will continue to practice primarily in the Rochester area. James is a commercial litigator with experience in commercial litigation, including contract, fiduciary and shareholder disputes. He also practices in labor and employment law and has significant experience counseling and defending employers. Rick represents business owners, organizations, and private clients with company formation, buy/sell agreements, mergers and acquisitions, and many other corporate and business transactional matters and disputes. “James and Rick are terrific additions to the firm’s Rochester practice,” said Bill Griffith, president of Larkin Hoffman. “Together, they have significant experience in commercial, real estate and litigation matters that will greatly assist our clients.”
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
a division of Law Bulletin Publishing Co. 13400 15th Ave North Suite C Plymouth MN 55441 For information call 952-885-0815
Christianson & Company Adds Mary Lindell Christianson & Company announced that Mary Lindell has joined the firm in July 2015 with more than 16 years of experience in the financial service industry, where she managed and serviced accounts with average balances of $5,000,000.. At Christianson & Company, Mary will work with both tenants and landlords to achieve their objectives. “In addition to working with local clients, Mary will be instrumental in helping us with several outstate retail redevelopment projects.,” said Christianson & Company President, Lisa Christianson. “Her expertise will broaden our reach throughout the state of Minnesota and her work ethic and ability to build strong client relationships based on integrity, trust and commitment add depth to our existing team of seasoned commercial real estate professionals,” Christianson added. Mary attended the College of Saint Benedict where she studied education and learned the importance of commu-
nity involvement. Mary prides herself as an educator and advocate and spends much of her time volunteering. She has served on the board and several committees at the Braemar City of Lakes Figure Skating Club. She is also involved with Teen Challenge and Meals on Wheels. In addition to serving others, Mary is a continuous learner. Along with obtaining her real estate license, she has her securities series 6 and 63 license and is mortgage certified.
Ryan Companies US, Inc. Hires Ashley Wurster as Director of Interior Design Ryan Companies US, Inc. is pleased to announce Ashley Wurster has been hired as Ryan’s Director of Interior Design. In her new position, Ashley is responsible for leading the interior design team and leading all interior design efforts within Ryan’s Architecture + Engineering department. Her initial focus is on corporate projects for existing customers, with plans to grow to support additional market sectors. “Ashley is an immensely talented interior designer with a deep understanding of how truly great design can reflect and support a company’s culture and brand,” said Mike Ryan, President of Architecture + Engineering at Ryan. “She has worked in virtually every style and office type and brings a unique owner’s perspective to her new role. Ashley will be a huge asset as we expand Ryan’s design capabilities.” Prior to joining Ryan, Ashley spent eight years at Target Corporation where she led the design on such notable projects as the Target North Campus expansion in Brooklyn Park, MN, Target’s Bangalore headquarters in India, and the Target government affairs office in Washington, D.C. She has a critical eye for functional design and creating superior corporate interior environments and is known for her ability to blend engaging aesthetics with practical concerns.
THE EXCELSIOR GROUP HIRES ANGELA MORRISSEY AS PROPERTY MANAGER The Excelsior Group (TEG) is proud to announce the recent hiring of Angela Morrissey. As a Property Manager for TEG, Angela is currently responsible for the Twin Cities commercial portfolio
consisting of 1.8MM SF. Prior to joining TEG, Angela was the Assistant Real Estate Manager of the Seattle portfolio for Frauenshuh HealthCare Real Estate solutions, where she was responsible for overseeing seven medical office buildings.
Knutson Construction promotes Micah Vainikka to assistant project manager Knutson promoted Micah Vainikka to assistant project manager. For more than two years, he has worked at Knutson as a project engineer. “Micah has proven to be a valuable member of the Knutson team and I am confident in his ability to take on this increased role,” stated Dave Bastyr, executive vice president of Knutson Construction. Vainikka has played an integral role on the recently completed Roseville Park projects, part of the Roseville Parks and Recreation Renewal Program. The project consists of demolishing and reconstructing six park buildings, remodeling three picnic shelters, and completing site work at all nine Roseville parks. “Micah was instrumental in the successful completion of the Roseville Park projects. He worked closely with the Park Board and community to ensure open communication was achieved allowing all projects to be delivered ontime and on-budget,” said Mark Custer, project manager for the projects. Custer also worked closely with Vainikka on the Hennepin County Human Services North Hub facility, located in North Minneapolis, one of Finance and Commerce’s Top Projects of 2014. The team met and exceeded the owner’s 19 percent minority and six percent women contracting goals with participant actuals of 29 percent minority and 11 percent women. Knutson also exceeded the minority workforce goals reaching 36 percent with a goal of 19 percent and were able to hire three percent of its workforce from the North Minneapolis community.
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Minnesota Real Estate Journal
News $25+ Million Southdale Medical Center Expansion Nears Completion The 25+ million dollar expansion of Southdale Medical Center, one of the Twin Cities’ largest medical office complexes, is nearly complete, according to Silver Oak Development, Oakdale, the project’s development manager. “The new medical office building received its certificate of occupancy in early June,” said Paul Reinke, president of Silver Oak Development, “and the first tenant has already moved in. The first phase of the parking ramp was completed in March and is being used by employees and valet parking. A second phase of the ramp, under construction now, will be finished in November.” The four-story, 57,000 square foot medical office building brings the Southdale Medical Center campus to over 350,000 square feet. The campus is connected by tunnel to the neighboring Fairview Southdale Hospital. Reinke said the project, under con-
struction since last summer, has been “both exciting and challenging---exciting because of the even larger concentration of additional healthcare services it brings to what is already one of the Southwest metro’s premier medical centers, and challenging because of its size and complexity. We had to coordinate and manage every aspect of construction without significantly disturbing ongoing clinic operations and with minimizing inconvenience to the center’s visitors, patients or staff.” Edina Mayor James Hovland said the expansion is “a reflection of the growing importance of the entire Southdale Medical campus to good health outcomes for both Edina residents and those in the broader Southwest metro region.” He praised Reinke and the entire development team for months of hard work in closely coordinating the planning and construction of the project with city staff.
Avison Young to provide agency leasing services for Minneapolis data center Avison Young, the world’s fastest-
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growing commercial real estate services company, announced today that owners of The 511 Building Data Center have selected Avison Young to co-lead the marketing of The 511 Building Data Center in downtown Minneapolis. Mark Evenson, an Avison Young Principal and Managing Director of the firm’s Minneapolis office, will lead the marketing and leasing efforts in conjunction with James Cali, a Senior VicePresident in DTZ’s Data Center Practice Group. The 511 Building Data Center is located at 511 11th Avenue in the heart of the Minneapolis central business district. Minneapolis’ premier telco hotel, the 511 Building offers up to 300,000 square feet (sf) of mission-critical space. The property is equipped for data centers, collocation, web hosting, multi-tenant telecommunications switching, fiber network-service providers and optical cable backbones. Featuring 85,000-sf floor plates, the five-story facility offers the largest contiguous blocks of data-center space in downtown Minneapolis. The building also offers an unmatched combination
August 2015
of power and connectivity, with more than 20 fiber carriers available and a PECO substation located directly across the street. “The property’s downtown location, breadth of fiber providers and state-ofthe-art data center infrastructure make the data center very attractive for latency-sensitive clients such as streaming media companies, the financial/healthcare sector and hosting/cloud providers,” comments Evenson. “We are thrilled to represent The 511 Data Center facility. The explosion of cloud platforms, data growth and bandwidthintensive applications is causing enterprises and hosting companies to outsource data-center requirements into premier facilities that can offer powered shell and turnkey solutions,” James Cali, DTZ. "The 511 Building Data Center is a multi-tenant data center offering redundant 100 Gig fiber providers, generators and robust cooling plant. The 511 Building is a low profile bunker style building built to withstand natural disasters. We have significant Infrastructure investments and the ability to grow
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upon request with the ability to work with out-of-state contractors and city officials. Looking forward we are seeing growth from both our international and USA clients,” said Varun Kharbanda
Another Food Truck Goes Brick-and-Mortar Green + The Grain Opens in LaSalle Plaza The first brick-and-mortar location of the popular food truck Green + The Grain has officially opened for business. Located at 800 LaSalle Avenue in the LaSalle Plaza Skyway, Green + The Grain offers healthy and delicious lunch and breakfast options, including wraps, smoothies, and salads. The new outlet is open weekdays until 3pm. “A growing number of food trucks are opening brick-and-mortar locations around Minneapolis and St. Paul to cash in on the year-round opportunity in our vibrant downtowns. LaSalle Plaza with its high quality and volume of people passing through, is the perfect location for Green + The Grain to grow their con-
Minnesota Real Estate Journal
cept, “said Jim Durda, Executive Vice President at Zeller Realty Group. Located within the Minneapolis Central Business District, LaSalle Plaza offers easy access to the entertainment district, Nicollet Mall, Target’s world headquarters and transit. This 30 story architectural gem features high image office and retail space, three levels of parking and critical access points to the adjacent YMCA and LaSalle Apartments. “Opening the LaSalle location has enabled us to operate more efficiently and effectively and we have exceeded our expectations since opening,” said Tiffany Hauser, owner, Green + The Grain. “We no longer share a kitchen but rather service our food truck out of the centrally located LaSalle Plaza restaurant. We look forward to continued growth and a year-round clientele.” In addition to Green + The Grain opening, LaSalle Plaza recently signed two new leases totaling more than 10,000 square feet of space. The Sun Products has already taken residence in LaSalle Plaza and Bayer Healthcare
LLC recently signed a lease with an expected move in later this year.
IRET CELEBRATES GRAND OPENING OF STATE-OFTHE-ART MEDICAL OFFICE BUILDING Investors Real Estate Trust, a real estate investment trust headquartered in Minot, N.D., officially celebrated the grand opening of its new 57,000 square foot medical office building, 6565 France Avenue at Southdale Medical Center in Edina, MN. The project also includes a new 1,300 stall parking ramp serving the area hospital campus that will be completed in the coming months. Local officials, including Edina Mayor James Hovland, joined IRET representatives, development partners, and tenants of Southdale Medical Center to commemorate the new building, which was developed to meet the growing demand for medical office space in the surrounding community. Charles A. Greenberg, IRET’s senior vice president of asset management, is excited about completion of the project.
August 2015
“The conclusion of this final phase of the Southdale Medical Center campus finishes work at one of the crown jewels of our entire portfolio. Our strategic plan for this property was to solidify its reputation as one of the finest medical office facilities in the region and this expansion accomplishes exactly that. We are immensely proud of everyone on our team who contributed to this goal.” Numerous local firms played a role in IRET’s $36+ million expansion of Southdale Medical Center. Key project partners included construction manager Silver Oak Development, Inc.; architect and structural engineer Collaborative Design Group, Inc.; general contractor PCL Construction; mechanical contractor Egan; and electrical contractor Gephart Electric. Connected on the first floor and lower level to the existing buildings on the Southdale Medical Center campus, the new building is already 25 percent leased to CCRM Minneapolis, which took occupancy in July 2015. Jill Rasmussen, principal of The Davis Group, has been retained to News to page 22
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Minnesota Real Estate Journal
August 2015
Affordable housing Advocates Discuss Need for Specialized Housing Options at 2015 Affordable Housing Summit By Wayne Schiferl, Baker Tilly Builders, developers, financiers and other advocates for affordable housing met this June for the third annual Affordable Housing Summit held in Minneapolis. The Summit, hosted by Baker Tilly, Winthrop and Weinstine, the University of St. Thomas and the Minnesota Housing Finance Agency, discussed a variety of issues, including how to improve affordable housing options for seniors, homeless, and special needs individuals and families. The Current Homeless Situation Helping to elevate people out of homelessness has been a struggle in Minnesota for a long time. In her Summit keynote address, Commissioner Mary Tingerthal of the Minnesota Housing Finance Agency stated that there are currently as many as 10,000 homeless Minnesotans, nearly 10% of whom are children. The state also has 600,000 residents considered “costburdened,” meaning they pay over 30% of their gross income towards housing. A notable gain regarding homeless-
Wayne Schiferl ness in Minnesota is a reduction in the number of homeless vets – now approximately 300 compared to 596 five years ago. Commissioner Tingerthal noted that the number could be approaching zero as early as 2016. The continued issue of homelessness and lack of sufficient capacity in affordable housing has been exacerbated by several factors. The past few
years have seen a significant increase in the number of modest income senior citizens, as well as an influx of larger families, leading to a widespread shortage of affordable housing. Historically, low vacancy rates enticed investors who have capital to fund more low-income housing developments, but rising construction costs due to the improving economy eliminate some of the incentive for these investors. The efforts of the Minnesota Housing Finance Agency and other affordable housing advocates have made considerable strides, but these factors demonstrate that Minnesota still has room for improvement as it seeks to better the lives of homeless and lowincome individuals and families across the state. Design Considerations in Development Among developers of affordable housing for seniors, homeless and special needs individuals, a new trend has been emerging: design consideration in architecture. In the past, the practice was to build for volume to help serve
the most people the most economically. Now not only are builders looking to build economically, but also to maximize quality of living for residents. An example of this shift is the “Higher Ground” building project in South Minneapolis. Designed by Cermak Rhoades Architects, it was constructed using a tiered system of living. Homeless shelter space located on the first floor maximizes capacity, while just one level up residents can “pay to stay” to gain more personal and sleeping space for as low as $7 per night. The top floor of the complex has full individual apartments at subsidized rates, some with views rivalling those of the luxury condos rising up in Downtown Minneapolis. Organizations are also exploring creative ways to meet the needs of residents suffering from mental illnesses, who may make up a portion of the lowincome population served by affordable housing. Chris Wilson of Project for Pride in Living, who spoke at the Summit, stated that they are currently designing multi-family residences which take into account the needs of Housing to page 20
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Minnesota Real Estate Journal
August 2015
Cushman & Wakefield|NorthMarq: Commercial real estate market sizzling in the Twin Cities By Dan Rafter, Editor
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ow hot is the Twin Cities' commercial real estate market? The latest Compass report from Cushman & Wakefield|NorthMarq tells the story: New construction activity here is soaring, but vacancy rates are not. The overall vacancy rate in the Minneapolis-St. Paul market did rise in the first half of 2015. But that slight rise came during a period in which construction crews added 1.75 million square feet of new commercial construction during the market. The overall multi-tenant vacancy rate for the TWin Cities market stood at 11.1 percent at the midpoint of 2015. That is a slight rise from an overall vacancy rate of 10.9 percent at the end of 2014, but this is mostly the result of the addition of 1.75 million square feet of new construction hitting the market during the first six months of 2015. And don't expect new-construction activity to slow in Minneapolis-St. Paul any time soon. Cushman & Wakefield|NorthMarq reported that another
1 million square feet of multi-tenant space is under construction. The overall market posted more than 2 million square feet of absorption in the first half of 2015, with positive absorption across nearly all property types. Mike Ohmes, executive vice president with Cushman & Wakefield|NorthMarq, said that the first half of the year saw developers rushing to complete new projects, especially in and around the urban center of the Twin Cities. The reason? A growing number of people want to live in walkable, urban neighborhoods, where they can ditch their cars, take public transportation and walk to shops, restaurants and entertainment. "Robust development and construction activity have continued throughout the first half of 2015," Ohmes said. "We expect that strong activity to continue throughout the remainder of 2015, with the Twin Cities cementing itself as an attractive market for investors and developers of all kinds." The Compass report highlights several attractive trends for the Twin Cities market. Consider the area's office seg-
ment. As of the middle of 2015, 16.4 percent of the office space in the Twin Cities stood vacant. The first half of 2015 saw more office-space absorption than was recorded in all of 2014. In good news for office-space owners, leases in this segment are getting longer, and landlords are now able to charge higher rents while passing out fewer concessions. Medical office space is especially strong in the Twin Cities, with the Compass report showing about 677,000 square feet of medical officespace construction now underway in the area. A big entry in this market is the Mayo Clinic, which this year opened its sports medicine center at Mayo Clinic Square in downtown Minneapolis. The area's industrial market remains strong, too. Cushman & Wakefield|NorthMarq reported that 1.38 million square feet of industrial space was absorbed in the Twin Cities during the first half of the year. Construction in this sector is strong, too. According to the Compass report, build-to-suit and speculative projects
are expected to bring another 1.38 million square feet in this sector in the next 12 months. The Twin Cities area hasn't seen this much absorption since before 2005, and experts with Cushman & Wakefield|NorthMarq are predicting that absorption levels in this segment could soon surpass pre-recession levels. The southeast submarket has been especially strong when it comes to industrial, with the vacancy rate for functional industrial buildings here that are 50 years or younger falling below 5 percent. The retail market is also on the rebound here, according to the report. Cushman & wakefield|NorthMarq reports that the segment's vacancy rate stood at 6.6 percent at the middle of 2015. That is the lowest for retail since 2006. At the same time, retail rents are nearing a new benchmark figure, almost in the $40-per-square-foot range for new small-shop space at topperforming properties. Retailers are getting creative, too, with many ownCRE to page 20
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Minnesota Real Estate Journal
August 2015
How Much Damage Can a Tenant From Hell Really Unleash? by Kevin Ortner, President & CEO Renters Warehouse
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e’ve all seen the horror stories on the evening news. Ransacked apartment units. The remants of an out of control party that has left a building completely battle scarred- and sometimes unhabitable. Yes, while many are able to enjoy great success from their investment properties, the ugly truth is that these profits can all disappear if one bad tenant gets into the mix. Seventy-one percent of landlords say that they’ve had problems evicting a renter even with justifiable grounds. Late rent checks, broken appliances, and disputes over damage deposits are among the most common issues that landlords face. Beyond this, it’s not unheard of for unhappy residents to cause willful and severe destruction to a property. From ‘Sharpie parties’ –where tenants invite friends over to vandalize the home with permanent markers, to ‘indoor swimming pools’, where renters flood the premises to go for a swim; there’s no shortage to the devastation that tenants can cause. The costs involved with repairing
damage left by a less-than-upstanding renter, plus the time and money that it takes to pursue an eviction can be enough to strike a sense of absolute fear in even the most seasoned and experienced property owner. But the good news is that an ounce of prevention is still worth a pound of cure. While you can’t always predict issues with renters, there are steps that you can take to dramatically reduce the chances of problem tenants accessing your rentals in the first place. Having a solid and airtight tenant screening process is one of the best ways that you can protect your properties from potential devastation. Let’s look at a few things that are central to this process. How to Establish an Effective Tenant Screening Process • Create a Tenant Application Process It’s a good idea to have an application process for candidates to complete. The right questions can help you to sift through unqualified tenants from the start. Develop an application form to have ready for prospective tenants to submit for you to review. Leave a section for tenants to list their basic
information: their name, date of birth, contact information, emergency contact information, all additional occupants including children, and the date they hope to move in. Also, ask: ‘Do you have any pets’? ‘Do you smoke?’ ‘Have you ever been evicted?’ and ‘Have you ever been convicted of a felony?’ Be sure to ask for references, employment information, and contact details for their previous landlord. Having these answers in writing can help in case of any disputes or issues that arise during the screening process. You may want to consider having an attorney review your form, just to make sure you’ve covered all of your bases, and to be certain there are no questions that could be considered discriminatory or cause legal issues. • Conduct Interviews The interview is essential. This is your opportunity to screen prospective tenants and discover whether or not they’re a perfect match for your home. Ideal questions to ask include: ‘What’s your monthly income?’ ‘Why are you moving?’ and ‘Are you willing to consent to a credit and background check?’ The interview should provie a good sense about whether or not the prospec-
tive tenant will be able to afford the rent and abide by the terms of your rental. • Engage in Diligent Research Always follow through with reference checks, credit checks, and background checks. Verify all of the essential information that the tenant provides; especially concerning their current employment and previous rental history. When contacting references, ask how long they have known the prospective tenant, and for their opinion on the tenant’s reliability and character. It’s especially important to connect with previous landlords, as this will give you a chance to get inside information on the tenant’s rental track record. Make sure you watch out for current landlords who may be desperate for a problem tenant to leave. They may gloss over the truth in an effort to get the tenant to move faster. Make sure to also contact former landlords who may be more likely to paint a more accurate picture for you. • Watch Out for Warning Signs Look out for red flags that may alert you to a potential problem tenant. If the Tenant to page 19
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Minnesota Real Estate Journal
August 2015
City, County Officials Like What They See in UrbanWorks’ Vision for the ‘West Loop’ “A huge, huge vision.” That’s how Fifth Ward City Councilmember Blong Yang describes UrbanWorks Architecture’s plans for the redevelopment of a large part of central Minneapolis, an area they call the “West Loop.” Yang’s description typifies the reaction of several city and county leaders who have viewed presentations on the vision in recent weeks. The West Loop, which UrbanWorks views as the city’s “next great neighborhood,” encompasses more than 200 acres of land, much of it underutilized, immediately adjacent to the surging North Loop. Transit-connected via the future Blue Line and the future Royalston Green Line station, most of the area lies within a stone’s throw of Target Field and the Target Field transit station. Itself a resident of the North Loop, UrbanWorks daily sees the opportunities the area presents from its own offices, which border it. The firm has for years been an active design force in the North Loop, including a lineup of successful developments for Schafer Richardson that already mark the border with the future West Loop—
Noah Bly 710 Lofts, 720 Lofts, 730 Lofts and Third North, as well other projects in downtown Minneapolis, including the soon to be completed 4Marq apartment tower. Noah Bly, UrbanWorks managing principal, describes the firm’s West Loop vision as a “coordinated concept that could potentially triple the devel-
opment value of the area, the result of enhanced connections between downtown and North Minneapolis.” The vision, Bly adds, anticipates hundreds of millions of dollars in market-driven development over a period of years. Its development would significantly expand the size and definition of “what we now consider ‘downtown,’ “says Neil Reardon, UrbanWorks designer. “It offers the opportunity to create a superior live-work experience, with a mix of uses ranging from apartments and condos to office and retail, with a special focus on the creative industries and much improved public spaces and infrastructure.” Minneapolis Council president Barbara Johnson says she is intrigued by the concept. “After the great success of redevelopment in the North Loop, this looks really exciting,” she said, calling it a logical extension of that success, “one that takes advantage of our city’s involvement in bringing in light rail and the Twins stadium, and all of the private investment that has been poured into the adjoining neighborhood.”
“The West Loop has dramatic potential,” she adds. “It’s ripe for what UrbanWorks has envisioned.” Despite the fact that the area has been ignored and neglected for a long time, she cited a number of factors that are already setting the stage for its rebirth—“especially the changes on Glenwood Avenue as it comes out of downtown, becoming a transformational street, and the connection to Heritage Park, which has been a huge success.” Johnson sees a few challenges as well. “There are a multitude of land uses in the area,” she said, “and we have to be sensitive to that—the Farmers Market, for example, which has a large audience. Mary Jo Copeland’s operation is another, as well as the many small companies operating there.” Johnson says there are possibly also “some potential underground issues. Soil quality, primarily. Because it’s a part of the Bassett Creek Valley it shares some of the same soil conditions the Sculpture Garden has—problems we are trying to attenuate right now. West Loop to page 21
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Minnesota Real Estate Journal
Grocery From page 1
Mid-America Real Estate Corporation is far from the only Midwest developer or broker that recognizes the drawing power of grocery-anchored retail. Oppidan Investment Company, for instance, is still developing its Excelsior Marketplace mixed-use development in downtown Excelsior, Minnesota. A key tenant of the development will be a Kowalski's Market grocery store, due to open later this summer in the 20,000-square-foot center. That's a formula -- a popular grocer in a densely populated area -- that investors are frequently turning toward today, Girardi said. “When times are good and everyone is doing great, every tenant can pay the rent,” Girardi said. “But when you go through a downturn or a recession, a lot of tenants who sell clothes or soft goods are more exposed to the economy. They might struggle to pay the rent, while the tenants who are selling everyday household items are viewed by investors as safer investments.” Grocery stores tend to feature longerterm leases, too, which also make them more popular among investors. “You don’t need to worry about your income stream. It is secure,” Girardi said. “There is often only a small portion of the retail center – the space occupied by
other tenants – that you have to worry about. There is only a small portion of the center where you’ll have to worry about replacing smaller tenants with shorter leases.” Grocery-anchored retail strong in Twin Cities Cushman & Wakefield|NothMarq recently released its Compass report for the first half of 2015. The report contained plenty of good news for the Minneapolis-St. Paul market, especially when it came to retail. According to the report, the retail segment’s vacancy rate stood at 6.6 percent at the midpoint of 2015, the lowest for this segment since 2006. Rents are rising in the retail sector, too, getting close to the $40-per-square-foot range for top retail properties, according to Cushman & Wakefield|NorthMarq. And some of the most desirable retail properties today? According to the Compass report, the retail sector is being led today in the Twin Cities by groceryanchored developments. This trend should only continue as several new grocers are now looking for new space in the market, most notably Hy-Vee. Cushman & Wakefield|NorthMarq reported, too, that domestic and foreign investors are increasingly targeting the Twin Cities, sending greater amounts of capital into the commercial real estate market here. While multifamily remains the most frequent target of investment dollars, the Compass report said that gro-
August 2015
cery-anchored retail centers have become increasingly popular investments, too. The Twin Cities market saw about $242 million worth of retail transactions during the first half of 2015, according to Cushman & Wakefield|NorthMarq. What makes the ideal anchor tenant? Joe Parrott, a senior vice president of retail services with CBRE, has long studied the performance of retail anchors. He even releases a regular retail anchor report. But what makes for an ideal anchor? Parrott says that depends on whether you are a tenant of a retail center or an investor. Parrott said that tenants whose business requires customers to come back to their stores on a regular basis -- say quick-service food restaurants, hardware stores or beauty salons -- love having grocery stores as anchor tenants. "Shoppers come back to grocery stores weekly or multiple times a week," Parrott said. "It becomes convenient for these shoppers to stop by the quick-service restaurant next door." But retailers who sell discretionary products, maybe in the jewelry or fashion space, prefer fashion, department stores or big box stores such as Bed Bath & Beyond as anchors, Parrott said. Investors, though, do like grocery store anchors, Parrott said, especially grocery stores that see a high volume of business. "That is a very safe investment because even if the grocer in place went out of
business, there will always be another grocer that wants to take over locations that have a history of high sales performance," Parrott said. "If the sales at a location are strong or above average, your risk of having a long-term vacancy is negligible." The grocery store business is changing, though. Parrott said that the traditional grocer category is getting smaller as it faces pressure from the high-end segment -- led by grocers such as Whole Foods and Mariano's -- and from the lower-cost end featuring such retailers as Target, Costco Wholesale, Aldi and Walmart. The most notable of the recent casualties in the traditional grocer category took place in the Chicago area as Dominick's Finer Foods, a once-strong grocer in that city, closed all of its stores in this market in 2013 and 2014. The problem Dominick's faced? Its prices weren't as low as what shoppers could find in the grocery sections of Walmart and its merchandise wasn't as high-end as what they could get at grocers like The Fresh Market. Despite the challenges traditional grocers face, Parrott says that this segment of the grocery industry will survive. "I don't expect the traditional grocery segment to go away," Parrott said. "There will always be a place for the traditional grocery store that offers a broad selection. The strongest players in this space will adapt and survive."
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August 2015
Hotels From page 1
The Twin Cities is a strong hotel market today, Thomas said. The Mall of America in nearby Bloomington, Minnesota, always attracts travelers, and those travelers need places to stay. Then there are the Fortune 500 companies in the Twin Cities that attract business travelers. The Minneapolis/St. Paul market is far from the only one seeing a surge in hotel sales and development. Marcus & Millichap, in its mid-year hotel report, said that the hotel business is on the rise across the country. Increasing demand for rooms had raised the annual occupancy rate of U.S. hotels to 65.2 percent at the midpoint of 2015, according to Marcus & Millichap. That is an impressive figure; Marcus & Millichap reports that this is the highest this rate has ever been, besting the prior record of 64.8 percent set 20 years ago. CBRE in May reported that U.S. hotels saw an increase of 12.3 percent in net operating income during 2014. That marked the fourth consecutive year of profit growth higher than 10 percent. Even better? CBRE experts predict that this profit growth will con-
Minnesota Real Estate Journal Tenant from page 14
tinue throughout 2016. The Minneapolis/St. Paul market is seeing a wide range of new hotel types hitting the market. Thomas said that select-service hotels are a big draw today. These differ from full-service hotels because they don’t offer services such as on-site restaurants or dry cleaning. Because of this, they are less expensive to operate, which is attractive to owners. They also charge lower room fees, attractive to travelers. Brands in this category include Holiday Inn Express and Hampton Inn. “These types of properties have higher margins,” Thomas said. “They don’t have the restaurant to worry. They don’t have that food-and-beverage component that involves staffing and service. They don’t have the overhead that a full-service hotel has. Consumers consider them to be a good value. They don’t have to pay for services that they aren’t going to use.”
applicant makes you feel nervous or seems desperate to move in as quickly as possible –this could be a warning sign. Watch out for candidates who question every aspect of your rental application process as this is an indication of someone who may be unable to follow your rules when renting. Legitimate candidates will understand that it’s important for you to conduct credit and background checks, and will be more than willing to comply with your requests.Make sure you compare the application and your notes from the interview to what you discover from the background check. Be extremely cautious of any discrepancies you find. • Keep It Legal Of course, as important as it is to have a solid tenant screening process, it’s also important to ensure that your process complies with the law. While you should watch out for warning signs, never screen tenants based on your gut feeling alone. Make sure to use the same qualifying process for all applicants, and treat all candidates equally to avoid accusations of discrimination. You should also use the same process each time you deny someone regardless of the reason for denial. A short email highlighting the reason is
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sufficient. Doing this properly and in writing can help to prevent any accusations of discrimination. • Get it All in Writing Once you have found a tenant, it’s important to ensure you have a rental agreement in place for the tenant to sign. A rental agreement contains clear, written guidelines, and helps to ensure that you and the tenant are both on the same page, preventing problems from arising due to future miscommunication. The agreement should include: the names of all the applicants, occupancy limits, and terms on rent –including late fees, acceptable payment methods, and charges if a rent check fails to clear. While many landlords are hesitant to implement a tenant screening procedure because it may seem time-consuming, in the end a solid screening procedure can save time, and prevent a world of pain. Taking the time to screen applicants upfront will help you to weed out problem renters and save yourself from costly evictions and extensive repairs down the road. Finding a tenant that’s a great match for your property is more than worth the time and effort it may take upfront. You’ll thank yourself later, and your wallet will thank you too!
Page 20 Housing from page 10
those with mental illness and even help them manage their condition. Recreational and outdoor space for residents is another important element. Wilson noted that individuals suffering from disorders such as schizophrenia benefit from walking, but that a basic circular pattern is too frustrating. Instead, his organization has found that creating an infinity walking path, similar to a figure eight, allows residents to walk and think freely. Features like this encourage residents to move more, which promotes the positive effects of exercise on their condition. Green space, gardening areas and other communal spaces encourage interaction among residents, which some might otherwise avoid were it not for the flow of the space making it a natural decision. Even color scheme and décor of the building and interior are chosen with care to help alleviate environmental stresses those with mental illness face. These features are not without a price tag, and in a period of rising construction costs, builders have turned to alternative options in building material to offset these costs. More modular components are being built offsite and then assembled onsite and developers are choosing more durable materials to reduce maintenance costs down the road. A Rising Need for Senior Housing
Minnesota Real Estate Journal
The continued growth within the senior housing market was also frequently discussed during this year’s Summit. Since Baby Boomers began reaching retirement age, the issues of senior housing and services have become top of mind for many developers. John Mehrkens, Vice President of Project Development for Presbyterian Homes & Services, was recently quoted in the Star Tribune and sums up the situation succinctly. “Every day between now and 2031, about 10,000 baby boomers across the country will turn 65—a tempting demographic for the $250 billion senior housing industry.” According to a March 25, 2015 blog post by the Minnesota Housing Partnership, by the end of 2015 there will be an estimated 1.57 million people aged 55 and older in Minnesota, or approximately 28% of the state’s total population. By 2030, this number will increase to an estimated 2.18 million Minnesotans, meaning this will continue to be an important and increasingly dominant conversation among builders, developers and investors. Several topics drove conversations pertaining to senior housing at the Summit, specifically the unique living needs of seniors and the consistent cash flow projects can produce. Seniors typically have more health related dependencies than the under 55 population. To meet this need,
August 2015
builders and developers are considering different amenities than they might consider for other housing markets, such as wheelchair-accessible floor plans or on-site health assistance. Despite the potential added costs of these and similar amenities, developers can benefit financially from longterm renters. Individuals in this demographic tend to move less frequently than tenants in other demographics, and a longer length of stay within a unit can have positive financial implications. It can drive lower vacancies and result in a more consistent cash flow for those units. Final Thoughts Housing is one of our most basic needs, and providing options reflective of the changing needs of the population can have a positive and longlasting impact on all Minnesotans. Highly specialized housing can create a pathway out of homelessness, provide a safe and meaningful environment for those suffering from mental illness, and support our growing population of seniors. The 2015 Summit addressed these ongoing issues and fostered conversations among affordable housing advocates about where the state goes from here. Article contributions Rocheford, Baker Tilly
by
Dan
CRE from page 10
ers repurposing old, tired space today. Multi-family, of course, remains sizzling in the Minneapolis-St. Paul area. The Compass report says that 5,000 new apartment units opened in the market in 2014. But despite this, absorption continues to outpace new supply. Vacancy rates in this sector have been below 3 percent since 2011, with the current rate at the midpoint of 2015 at 2.7 percent. Cushman & Wakefield|NorthMarq predicts that developers will deliver 3,000 new multifamily units to the market in 2015. Much of this multifamly development has been in and around downtown Minneapolis. NOt surprisingly, both domestic and foreign investors are targeting the Twin Cities, sending greater amounts of capital into the commercial real estate market here. Investors are most interested in apartments, student housing and groceryanchored shopping centers. They are also sending money after Class-A office properties, value-added flex industrial buildings and new medical-office buildings. According to the Compass report, the apartment investment market is especially strong, and was nearing $550 million in transaction volume in the first half of 2015. The office market is on pace to reach $1.25 billion in investment activity for all of 2015, while about $242 million in retail center transactions closed in the first half of this year.
August 2015 West Loop from page 16
And there are also some grade issues.” But all of these can be overcome, she says. Asked what she thinks would drive developer interest in making the vision a reality, she believes placing a major league soccer stadium just north of the Farmers Market would be a “real catalyst and would call attention to the area in a major way.” She does not see tax increment financing as being essential to realizing UrbanWorks’ vision. “There has not been much demand for TIF in the North Loop, and we’re pretty stringent with TIF anyway, although we do make it available to reach some of our goals—affordable housing and job creation, primarily. But I don’t see us using TIF for high rise condos or apartments.” Councilman Yang takes a slightly different view. “It’s a really big idea,” he says. “The big challenge is funding it. I think it will take something of everything to make it happen. Even public investment might be necessary.” The soccer stadium may be the critical piece to getting it started and attracting the development community’s attention, he says. “A stadium there would make it a place where people want to live and develop. Minneapolis makes sense for the stadium. It’s a larger market than St. Paul, more people are interested in soccer, and combined with improvements to the Farmers Market, it might do the trick. But we need to do
Minnesota Real Estate Journal
something as a city to help make it happen.” Third Ward Councilmember Jacob Frey, who represents the neighboring North Loop as well as the Central Business District, says UrbanWorks vision for the West Loop “could be a wonderful economic opportunity, and a huge contributor to the city’s future success.” Describing the area as “a gully that has divided downtown from North Minneapolis for more than 50 years,” Frey says that during that time numerous efforts have been made to close the gap. “It’s time to try something new.” He says city involvement is crucial. “We have to incentivize development there with some concrete planning, and maybe more. Until the grid is re-established, we will continue to have a disjointed connection with the North side.” Frey is enthused that a working group is beginning to explore ways to locate a major league soccer stadium in the area. “With a soccer stadium, there would be more ‘there’ there in the West Loop,” he says, something that would draw attention and attract developers. Hennepin County Commissioner Peter McLaughlin calls it a “big, visionary plan—with lots of land that offers a lot of opportunities.” He thinks the Royalston Greenline transit corridor connection could be the catalyst. “LRT investment will be a critical factor,” he believes. “Right now the perception of the area around the Farmers Market is
that you can only get there by car and it’s a long way from everything. It’s really not, but that’s the perception, mainly because the connectors are not that good.’ “But with transit there will be thousands of people going through that neighborhood every day,” he says. “They’ll see the potential for themselves.” McLaughlin says key infrastructure investments will be needed, and cites the redevelopment of the Stone Arch Bridge area as an example. “It went through a similar transformation—no single big asset, but lots of land and a lot of opportunity, driven by investments in infrastructure.” “Also think about the North Loop,” he said,” and the area by Target Field. The ballpark literally expanded our downtown by creating a bridge over I394. That’s what has to happen here. It will take some investments in and around the Royalston stop: a better way to get to the Farmers Market from Target Field, a better way across Olson Highway, a new way and a friendlier pedestrian pathway to Glenwood Avenue—all of them designed to reach the area in a safer, more convenient way.” A soccer stadium, if it ends up being located on a West Loop site, “would be a big help,” he said, “the kind of very quick, catalytic investment that could trigger all kinds of activity.”
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Whether the major league soccer stadium actually ends up being the centerpiece of the West Loop remains a matter of conjecture. Minnesota United and the team’s owners are in discussions with the city regarding a property tax exemption for the facility, which they say is essential to making the $150 million stadium project financially viable. Recent meetings between the city and the team’s owners—Bill McGuire, the Pohlad family and the Taylor organization—are the first by the so-called “working group,” and dedicated only to an exchange of information. Mayor Betsy Hodges is opposed to the tax exemption, while the team is discussing a Midway site with the city of St. Paul that is already off the tax rolls, eliminating a major hurdle to building there. A major league soccer deadline for having a site that meets its criteria has already passed. Another is looming: the team’s option to buy the West Loop site from its current owner expires this fall, adding to the uncertainty. But whatever the outcome, Commissioner McLaughlin pretty much summarizes the sentiment of the elected officials we spoke to regarding UrbanWorks’ view of the development potential of the West Loop. “Looking to the future,” McLaughlin says, “we’re completely in tune with the vision that UrbanWorks has presented, with or without a soccer stadium.”
Page 22
Minnesota Real Estate Journal News from page 8
lease the new building as part of the Southdale Medical Center campus, which now totals in excess of 350,000 square feet. New tenants will benefit from the building’s efficient design and Southdale Medical Center’s tunnel access to the adjacent Fairview Southdale Hospital.
Dougherty Mortgage LLC Closes Fannie Mae Loan for The Peaks at Searcy Dougherty Mortgage LLC, a full service national mortgage banking firm, recently closed a $315,050 Fannie Mae loan for the refinance of The Peaks at Searcy, a 48-unit multifamily affordable housing property located in Searcy, Arkansas. The 18-year term, 30-year amortization loan was arranged for The Peaks at Searcy, Limited Partnership, by Dougherty’s Minneapolis, Minnesota office. The pet-friendly property features a clubhouse, laundry facility, playground, fitness center, business center and swimming pool. Individual units have newly renovated interiors and
include air conditioning, dishwasher, microwave, washer and dryer connections and either a patio or balcony.
Dougherty Mortgage LLC Closes $10.6 Million HUD 223(f) Loan for Olympic Ridge Apartments Dougherty Mortgage LLC, a full service national mortgage banking firm, recently closed a $10,554,700 HUD 223(f) loan for the refinancing of Olympic Ridge Apartments, a 143-unit multifamily market rate rental property located in Eden Prairie, Minnesota. The 35-year term, 35-year amortization loan was arranged by Dougherty Mortgage's Minneapolis office for the Borrower, Olympic Ridge Limited Partnership. Olympic Ridge Apartments is professionally managed by Park Avenue of Wayzata, Inc., and offers nine threestory wood-framed walk-up buildings with attached garages, some with individual entrances. Amenities include a whirlpool spa, exercise and party rooms, restrooms with showers, tot lot and volleyball net.
Ryan Companies US, Inc. Announces Relaunch of Downtown East Website Ryan Companies US, Inc. is excited to announce the relaunch of the Downtown East project website: www.downtowneastmpls.com. Downtown East is Ryan’s $400 million mixed-use development located on a five-block, 12.5acre area near the new US Bank Stadium in downtown Minneapolis. The refreshed website will serve as a platform for communicating project milestones, updates and events and includes such features as the Downtown East project history and timeline, a revised fact sheet and site map, animated videos, site and event photography, as well as current renderings of the overall project, EDITION Apartments, Radisson Red, and The Commons. The Downtown East project includes 1.2 million square feet of office space in two 17-story towers owned by Wells Fargo, 26,000 square feet of retail space, a six-level parking ramp owned by the Minnesota Sports Facilities Authority, a set of four sky bridges and internal sky-
August 2015
ways, a Radisson Red hotel, a residential complex named EDITION, and a 4.2 acre public green space call The Commons.
MARCUS & MILLICHAP ARRANGES THE SALE OF AN 18-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 Benton Place, an 18-unit apartment property located in Saint Cloud, Minnesota, according to Craig Patterson, regional manager of the firm’s Minneapolis office. The asset sold for $800,000. Annie Arneberg and Cole E. Harstad, investment specialists in Marcus & Millichap’s Minneapolis office, had the exclusive listing to market the property on behalf of the seller, a private investor. The buyer, a private investor, was secured and represented by Mox Gunderson, Dan Linnell and Cole E. Harstad, investment specialists in Mar-
August 2015
cus & Millichap’s Minneapolis office. Speaking with Ms. Arneberg, “Benton Place Apartments, built in 1984, has enjoyed a long history of full occupancy. The building consists of 1 one-bedroom and 17 two-bedroom units along with nine detached garages situated on over an acre of land. The buyer, who is originally from the area, was attracted to the property due to the value-add opportunities and potential cash flow. The fact that his family could easily help him manage the asset made this a seamless acquisition and addition to his real estate portfolio.” Benton Place is located at 200 14th Avenue SE in Saint Cloud, Minnesota
MARCUS & MILLICHAP ARRANGES THE SALE OF A 28,096-SQUARE FOOT OFFICE BUILDING Marcus & Millichap (NYSE: MMI),
Minnesota Real Estate Journal
a leading commercial real estate investment services firm with offices throughout the United States and Canada, today announced the sale of 141 West Lafayette Frontage Road, a 28,096square foot office property located in Saint Paul, Minnesota, according to Craig Patterson, regional manager of the firm’s Minneapolis office. The asset sold for $950,000. Claire J. Roberts, SIOR, investment specialist in Marcus & Millichap’s Minneapolis office, had the exclusive listing to market the property on behalf of the seller, a limited liability company. Speaking with Ms. Roberts, “The seller had purchased this asset less than two year ago with plans to redevelop the property. When those plans changed, they put the property back on the market and saw immediate interest. The transaction reflects the continued demand for properties with light indus-
trial zoning in the West Side Flats area of St. Paul.” The Property is located at 141 West Lafayette Frontage Road in Saint Paul, Minnesota.
Cushman & Wakefield | NorthMarq Awarded Leasing Assignment for Wells Fargo Place Cushman & Wakefield | NorthMarq (CWN)’s www.cushwakenm.com office brokerage team of Senior Director Eric King and Senior Associate Rob Davis were chosen by Unilev to handle all leasing for Wells Fargo Place, a 634,895 sq. ft. Class A office building in St. Paul, Minn. Located at 30 East 7th Street and the tallest building in the city, the 37floor Wells Fargo Place offers outstanding amenities, access to public transportation, panoramic views of the surrounding area and is currently approximately 89 percent occupied. Wells Fargo Bank is the anchor tenant of the building and occupies over 54,000 sq. ft. Wells Fargo Bank and the St. Paul Federal Credit Union both have retail locations on the Skyway; other
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tenants include Minnesota State Colleges and Universities, AgriBank, Arch Insurance, HKM Law, Merrill Lynch and Larson King Law Firm. According to Davis, Wells Fargo Place offers an exceptional opportunity. “Wells Fargo Place really is the premiere office building in downtown St. Paul,” said Davis. “With access to the unique retail and hospitality choices in the city as well as theatres and museums, business owners and their employees will find that this office location is ideal. Plus with the light rail right outside the front door, the building offers its tenants the convenience of public transportation options as well.” Currently, there is 84,087 sq. ft. available to lease in Wells Fargo Place – over 20,000 sq. ft. of that available in one contiguous space. The office building offers its tenants a fitness center, conference facilities and food court, full onsite property management services, 24hour security and access to onsite parking.