Plymouth offices bought, sold in a year

One year ago, Minneapolis-based Falcon Ridge Partners purchased a Plymouth office building leased by UnitedHealth Group, then signed the tenant to a new lease as that tenant fixed up the building.

This week, the 178,385-square-foot property at 6150 Trenton Lane N. sold to Omaha-based Waitt Co. for $24.25 million, according to a certificate of real estate value made public on Monday. Waitt, which already owned an office building leased to Medtronic down the road at 4600 Nathan Lane, decided to buy in the Twin Cities again when it learned that the building was on the market, said Waitt Senior Vice President Clark Horgan.

This time around, the Trenton Lane building won’t be going anywhere for a while.

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Dominium purchases new headquarters in Minnetonka

Minnesota’s largest apartment owner will soon have a new tenant: itself.

Long based in Plymouth, Dominium will soon be relocating its headquarters to the Crest Ridge Corporate Center at 11055 Wayzata Blvd. in Minnetonka. The company purchased the 120,000-square-foot property for $18.5 million on Dec. 27, according to a certificate of real estate value made public Monday. The price works out to $154.16 per square foot.

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’80s fixer-upper draws $15 million in Maple Grove

A Georgia investor that worked the past two years to improve the fortunes of an aging Maple Grove office building has nearly doubled its money in selling to a Twin Cities buyer.

Atlanta-based Redline Property Partners sold the Arbor Ridge office building at 6900 Wedgwood Road N. for $15 million, according to a certificate of real estate value made public on Dec. 5. The company bought the 85,404-square-foot building in 2017 for $8.42 million.

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Maple Grove offices make $16 million comeback

A Chicago investor that purchased a long-empty Maple Grove office building seemed to find value in the property thanks to a new lease signed by the parent company of St. Jude Medical.

Syndicated Equities paid $22.77 million for a 97,257-square-foot building at 6820 Wedgwood Road N., according to a certificate of real estate value made public Friday. Built by Minneapolis Ryan Cos. US Inc. in 2005 at the southwest quadrant of Fish Lake Road East and Interstate 494, the Class A office building was home to offices for The Hartford insurance company. The Hartford moved out of the building in late 2014 after Prudential Insurance Co. of America’s acquired The Hartford in 2012.

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Just Sold: Developer buys one of Woodbury’s last farms

Drivers on Dale Road in Woodbury still see the 120-acre Burandt family farm, much has it has been for more than a century.

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Lake Calhoun Flats sell for $33 million

Weidner Apartment Homes has added apartments with a fading Lake Calhoun view to grow its Minnesota portfolio to 18 properties. Kirkland, Washington-based Weidner paid $33 million for the 158-unit, two-building complex at 3036 W. Lake St., according to a certificate of real estate value made public on Monday.

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New York investor buys 2 vintage Minneapolis buildings for $21 million

Both owned by the same family for four decades.

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C&W team represents Alidade in portfolio sale

The Capital Markets team of Avery Ticer, Scott Pollock, Tom O’Brien and Terry Kingston represented Alidade Capital in the sale of three buildings — office properties at 12400 Whitewater Drive in Minnetonka, as well as the Olympia Business Park buildings at 1325 and 1401 American Boulevard east in Bloomington. The properties sold for a combined $10.5 million.

C&W team sells condo building in NE Minneapolis

The team of Lance Steiger and Robert Dulin sold the Crescent Trace building, at 1101 Main Street SE in Minneapolis, for $12.4 million. The deal puts the ownership of 55 condo units in the hands of Blackhawk Investment Group. The former owner is Scott Weber, a local investor.

Cushman & Wakefield January 2019 Compass Report: Commercial Real Estate Remains Active Even During Late Stages of Record Cycle

The Twin Cities multitenant commercial real estate industry remained active in the second half of 2018, even as multiple property types faced changing occupier and consumer preferences, dramatically outpacing projections for absorption and showing staying power for 2019 and beyond. At the end of 2018, the market’s multitenant properties posted a vacancy rate of 10.9 percent, according to Cushman & Wakefield’s bi-annual Compass Report, up slightly from the 10.6 percent rate posted six months prior.

A total of just over 1 million square feet (msf) was absorbed by occupiers throughout the office, industrial and retail property types in the second half of 2018, significantly more than what Cushman & Wakefield had projected for the six-month period. 2018 ended with 2.78 msf of absorption across those property types, the market’s best year for absorption since 2015. The industrial sector drove much of the activity with 2.78 msf absorption over the course of the year. Office saw 600,000 square feet (sf) of absorption, while retail saw negative absorption of the same amount.

New construction continued forward at a healthy pace, with 1.5 msf being built across all property types in the second half of the year. That brought the year-end construction completions to 2.1 msf, down slightly from the 2.5 msf delivered to the market in 2017. The pace is expected to continue into 2019, the first half of which will see approximately 1.5 msf of space delivered to the market, a number that doesn’t include single-tenant build-to-suit developments.

“We’ve seen a lot of changes in the commercial real estate industry during this record-breaking economic cycle, but occupiers and investors remain active across all property types in our market,” said Mike Ohmes, Managing Principal in the Minneapolis-St. Paul office of Cushman & Wakefield. “Our firm continues to project strong absorption in early 2019, and significant properties are under construction, signaling an encouraging start to this year.”

In the second half of 2018:

  • Demand in the Hotel market outpaced supply. Even accounting for the more than 6,000 rooms delivered during this economic cycle, hotel demand surged past supply in 2018, growing by 5.0 percent. Supply growth will cool as overbuilding concerns and escalating costs deter some developers. There are currently another 6,000-plus hotel rooms in some stage of development.
  • The Medical Office paused amid continued adaptation by users. Leasing and construction have slowed as health systems and providers evaluate their shifting environment and seek to modify their real estate strategies. That may mean some changes are in store for buildings constructed for medical uses that no longer meet the needs of users and their clients. Meanwhile, health care users are among the more active companies seeking retail spaces.
  • Retail took steps forward after a string of national bankruptcies. Users are starting to chip away at the inventory of big-box vacancies that have hit the Twin Cities over the past 18 months as retailers such as Sears, JC Penney, and Toys R Us close struggling locations. Some will find single users and many will be demised for smaller retailers, but one constant is that landlords and retailers alike will need to remain flexible. Smaller retail spaces continue to lease well, and many value retailers, fitness brands and fast-casual restaurants are aggressively shopping for new locations.
  • Industrial remained active all over the Twin Cities. Industrial has been arguably the biggest growth sector for the Twin Cities commercial real estate market during this cycle, and that growth only continued in the second half of 2018. The market absorbed more than 1 msf in the last six months, bringing its yearlong total to just under 2.8 msf, its best number since 2015.
  • Investors kept the Land market busy, seeking out suburban development positions. National homebuilders are doing their best to strategically cope with rising interest rates and construction costs, finding prime parcels for “low-density residential,” the hottest sector in the land market today. Still, builders won’t overpay for lots, and sellers have abandoned unrealistic pricing expectations.
  • Capital flowed into the Twin Cities seeking new opportunities. The market continues to attract investors from other markets, who are interested in yields unmatched by coastal markets. But a lack of for-sale properties continues to be a hurdle for multiple property types. Still, multifamily, office, industrial and retail boasted higher sales volumes in 2018, and plenty of notable assets are expected to transact in 2019.
  • Multifamily’s bull run continued, while the market waited for another big wave of openings. The sector’s ability to withstand thousands of new units coming online has been remarkable, resulting in an extremely tight 2.3 percent vacancy rate. 2019 will be a year to watch for the market, with thousands more units on the way and concessions already creeping up.
  • The Office market redefined itself. Despite ongoing changes in office leasing, the market remained active in the second half, with 365,929 sf of absorption recorded in the past six months. Market fundamentals are good – even great in some pockets – with both vacancies and rental rates showing improvement. There are plenty of trends to watch in 2019, including space coming back in the south/airport market and co-working’s continued rise in the Twin Cities.

The full Compass Report is available online at