A Plymouth flex-office complex that was purchased three years ago – then rehabbed and leased to a set of technology companies — has produced a significant gain for the seller.
A group of investors led by Twin Cities real estate veteran Peter Mork paid $17.7 million for the 150,294-square-foot Vicksburg Business Center, according to a certificate of real estate recently made public. The 31-year-old building at 2800-2892 Vicksburg Lane N. is now part of a 5 million-square-foot portfolio controlled by Mork and Minneapolis-based Capital Partners.
The deal closed on Aug. 15.
The seller is an entity related to St. Louis Park-based Eagle Ridge Partners. The company paid $1.03 million for the Vicksburg Business Center in 2015, according to Hennepin County property records. Eagle Ridge did not respond on Monday to a request to comment on the transaction.
Capital Partners’ purchase works out to $117.77 per square foot. Hennepin County values the property at $7.53 million for tax purposes.
The property’s jump in value lies in the improvements Eagle Ridge made and the type of tenants it brought to the building, said Mork, a founding partner of Capital Partners. Eagle Ridge remodeled the once “run-down” building, adding parking, putting on a new roof and updating the exterior finishes, he said.
The building is now more than 92 percent occupied, Mork said. The anchor tenant is lighting company Energy Management Collaborative, which leases more than 69,000 square feet of space, according to CoStar. Other tenants include medical device designer XiMedica and Production Tool & Manufacturing.
“They did a wonderful job of attracting some nice tech companies,” Mork said of Eagle Ridge.
The industrial space vacancy rate in the Twin Cities’ west and northwest market is 8.2 percent, according to the Twin Cities office of Colliers International. But the vacancy rate for flex-office space is 4.9 percent.
The overall industrial vacancy rate in the Twin Cities is 6.34 percent.
Both Capital Partners and Eagle Ridge have been active buyers in the Twin Cities this year. In January, a joint venture between Capital Partners and New York-based Investcorp International paid nearly $51 million for a portfolio of industrial properties in the Twin Cities. Two months later, Eagle Ridge and Maryland-based Artemis Real Estate Partners paid $70 million for a 914,698-square-foot portfolio of 12 tech-oriented industrial buildings.
Capital Partners plans to own the Vicksburg Business Center for the “long term,” Mork said.
