After hearing from more than 100 suitors, Artis has sold part of its Twin Cities industrial portfolio in a $70.6 million deal with Capital Partners and PCCP.
Artis, a Winnipeg-based real estate investment trust, announced its intention to sell the properties in May, Finance & Commerce previously reported. Last Friday, a joint venture between Minneapolis-based Capital Partners and Los Angeles-based PCCP closed on the purchase of 1.2 million square feet of space spread between 14 buildings on seven sites around the suburbs of Minneapolis-St. Paul. The average purchase price per square foot for the portfolio works out to $59.
Competition for the properties was fierce, said Judd Welliver, a broker with the Minneapolis office of Los Angeles-based CBRE, which represented Artis. The portfolio drew “the most active bidding field [CBRE had] ever seen” for an industrial portfolio in the Twin Cities, he said, and the lineup included new players that had never invested in Minnesota before.
“We had over 100 confidentiality agreements signed,” Philip Martens, executive vice president of the U.S. region for Artis, said Monday in an interview. “We were really surprised and encouraged that there was this kind of demand. We went through quite a few rounds to shake loose the winner.”
Properties in the portfolio include:
- Corporate Square A, B, C, E and F at 990 and 1000 Apollo Road and 3110 and 3160 Neil Armstrong Blvd., Eagan.
- Eagan Industrial Warehouse, at 1170 Eagan Industrial Blvd., Eagan.
- Braemar Business Center A and B, at 7620-7664 78th St. W., Bloomington.
- Northpoint Industrial Center 1, 2 and 3, at 5700-5800 Main St. NE, Fridley.
- France Avenue Business Park I, at 4837 Azelia Ave. N., Brooklyn Center.
- Round Lake Business Center, at 4354-4392 W. Round Lake Road, Arden Hills. [[bullet]] Burnsville Business Center A at 12235 -12287 Nicollet Ave. S., Burnsville.
Collectively, there are about 50 tenants in the buildings, including Ameriprise Inc., Staples, Supply Technologies LLC and Galil Medical Inc. The overall occupancy rate was 81 percent at the time of the sale.
Capital Partners co-founder Peter Mork said his company focuses on flex and office warehouse properties, a particularly hot segment of the market right now. With the addition of the Artis properties, Capital Partners now has nearly 4 million square feet of owned or managed commercial real estate in the Twin Cities.
“It’s a great subset of quality, urban industrial real estate. We feel confident given its location and its history of occupancy that these properties will continue to perform as they have,” Mork said Monday, adding that his company is still aggressively seeking investment opportunities.
Artis was represented by Welliver, Ryan Watts, Sonja Dusil and Tom Holtz, all of whom work out of the Minneapolis office of Los Angeles-based CBRE. The buyers represented themselves.
The transaction makes Capital Partners one of the largest holders of industrial space in the region, Welliver said, though he declined to give the company a specific rank.
Martens said the sale allows Artis to refresh its holdings in Minneapolis-St. Paul.
“We wanted to focus on new development and buying newer quality products,” Martens said
Artis is interested in Class A industrial and office stock in the Minneapolis market, Martens said. Now that the REIT has closed on the deal, it has about 3.5 million square feet of industrial space in the region. Artis has 9.8 million square feet of commercial real estate in the area when office and retail properties are included.
Executives with PCCP could not be immediately reached for comment on Monday.
News of the deal surfaced in a CBRE press release.
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