WEST BLOOMINGTON BUSINESS CENTER
6300 W Old Shakopee Rd, Bloomington, MN
Written by: Fred Hedberg
In 1997, Fred Hedberg, Principal of Paramount Real Estate Corporation was asked by a past client to determine the value and marketability of some excess land that was remaining after building a mini-storage facility on a site in Bloomington, Minnesota. Fred provided a valuation and marketing plan for the land. He also suggested that his client might want to consider developing an office-showroom or industrial building on the site. The market for that type of product was very strong at that time. Fred suggested to his client that if this was of interest, he would like to co-develop and own the building with his client.
Forming a Partnership-The prospect of continuing to own the land and to not pay capital gains tax on a sale was appealing to Fred’s client. It was beneficial having the opportunity to partner with a seasoned real estate professional who had a good understanding of the market and what kinds of buildings and spaces tenants were looking for at that time. They agreed to move forward on a new development together. They began to work with an architect and contractor to lay out a building on the site that would meet current market demands for space and to meet the test of time.
Developing the Property-After a review of financial projections prepared by Fred, a partnership was formed to move forward with the project. Construction drawings were completed, city approvals and financing was secured. Krause Anderson was selected to act as the general contractor for the new 80,714 SF project called West Bloomington Business Center.
Completing the Project-Paramount Real Estate Corporation was hired to lease and manage the building for the partnership. The shell building was completed in 1998 and it was fully leased and built out by the end of 1999. The building attracted well-known local and national tenants that leased the majority of the building as office space.In 1999 the building was recognized by NAIOP as a recipient of their Awards of Excellence for the Light Industrial-High Finish category. The building has performed well though the various real estate cycles that followed and has stood the test of time as different tenants with uses other than office have found it to be a desirable building and location for their businesses.
Selling the Building-After 20 years of ownership, Fred and his partner decided that it would be in their best interests to sell the building during the current business cycle for estate planning purposes and to maximize their return on the investment. Fred found a local investor that was in need of a 1031 exchange property. West Bloomington Business Center fulfilled his exchange requirement and his desire to own a well performing, high quality asset. The property was sold in August 2018 and the new owner hired Paramount Real Estate Corporation to continue to lease and manage the building.
Paramount Continues to Lease and Manage Property-Fred and his leasing and property management team are excited to be able to continue to work on this project in the future. See detailed information about the space currently available at West Bloomington Business Center.
If you would like real estate investment advice,
please contact: www.paramountre.com
For firms whose growth is uncertain . . . or . . . perhaps a firm that is opening a new office or starting a business . . . subleasing space can be a sound alternative. However, just as with any real estate transaction, caution is always in order.
Get to Know The Sublessor:
First, it helps to understand why the original tenant wants to sublease. Is their business struggling? Have they lost a number of key employees? Did they overestimate their future growth? Or perhaps they are reconfiguring their space into a more collaborative environment and find they don’t need all of the space. What are their future plans? When does the prime lease expire? All of this is key since subtenants must comply with the terms of the prime lease.
Second, most sublease space is leased in an “as is” condition, meaning that the prime tenant will provide no dollars for any changes to the space. Therefore, review the language of the lease to see what restrictions might apply to any alterations. Generally, the prime landlord’s consent and approval is mandatory. Also, if you plan to make any significant changes, consult the prime landlord. Changes that actually affect the configuration or general function of the space can cause problems in re-letting the space once you move out.
Have an Real Estate Professional Review the Lease:
Lastly, ensure that the terms of the sublease document are sound and complete and that you, as the subtenant, are protected in the event of some kind of default by the sub-landlord.
If we can offer any advice or assist in any way, please feel free to contact Paramount. Proper preparation before moving forward is essential to any successful real estate transaction.
For the best in commercial real estate
service and solutions, call Paramount.
Have you ever wondered why operating expenses vary from property to property? Energy consumption, service levels and service contracts can vary greatly so it is advisable to secure the details prior to lease execution.
Several recent office lease transactions Paramount has been involved in highlight the need for a close review of a property’s operating budget. Some “full service” leases may include daily cleaning, vacuuming, replacing light bulbs and cleaning your breakroom. And then others may not include these services at all or the services may be on a more limited basis. While most Property owners reserve the right to change rules and regulations and janitorial specs, it is a good practice for your representative to take the time to request the budget and janitorial specifications. Once you have the detailed information you will be better able to compare properties. After settling on your most desirable property, a close review of the associated lease language may uncover conflicts or missing details that might surprise you during your term. As an example, say your employees prefer to eat lunch in your office suite, this practice probably makes it imperative that janitorial specifications would include daily trash service. No one wants to smell that reheated salmon the first time let alone the rest of the week!
Knowing the service level upfront will allow you the opportunity to verify the details are incorporated into the final lease. After all, operating expenses and real estate taxes can be 50% or more of your overall rent and you should only be paying for services you receive.
Need real estate advice. Call Paramount.
TRUSTED. DEDICATED. EXPERIENCED.
Have you purchased a commercial or industrial building lately? If so, then you know the Minnesota Pollution Control Agency is aggressively regulating vapors that may seep into buildings. Cracks in concrete floors, holes in the foundations, and just plain porous concrete can be conduits for harmful chemical vapors that may exist from contamination on your property or even the neighbor’s property.
Environmental consultants are recommending vapor testing for sites that are near known
groundwater and soil contamination.
If the tests are positive, a second round of testing may be completed before designing a treatment system. Typical treatments include creating negative pressure under the floor slab and venting it out the roof. This can be expensive, $1.00-$2.00 per building square foot. As you may know, when the MPCA is concerned, so are the banks. We have worked on four transactions in the last two years that required vapor treatment. It did not stop the transactions, but the process takes time, effort, and attention to detail in order to be successful.
Need real estate advice. Call Paramount.
TRUSTED. DEDICATED. EXPERIENCED.
In order for a building to earn LEED Certification, it must meet certain criteria and goals within the following categories:
Location and Transportation: How close is the project to mass transit?
Materials and Resources: Will the project use locally sourced, sustainable products?
Water Efficiency: To what extent will the project reduce potable water usage?
Energy and Atmosphere: How will the project improve energy performance and indoor air quality?
Sustainable Site: To what extent will the project utilize nearby natural resources and ecosystems that can naturally take part of the design, minimizing environmental pollution?
Regional Priority Credits: This addresses particular concerns based on project location
Innovation: Any idea that is not covered under the main LEED areas
Each of these respective categories contains a series of opportunities to earn credits. The project earns points when it uses and integrates these opportunities. The more points the project earns, the more sustainable is the building. Depending on the number of points gained, the project can then earn certification as a certified building or as a silver, gold or platinum building.
Benefits of a LEED Certified building are many:
Reduced use of energy and water
Reduced operation and maintenance costs
Reduced construction waste during the construction process
Increased indoor air quality
Usage of recycled materials
Increased employee performance, satisfaction and retention
Need advice on LEED. Call Paramount.
TRUSTED. DEDICATED. EXPERIENCED.
Qualifying your real estate needs, researching, locating and negotiating a new lease or purchase of a property is by no means the end of the relocation process for most companies.
One of the most important and costly items within relocating a business operation is the actual move itself. This activity requires diligent planning, multiple bids for competitive pricing, knowledge related to construction, furniture systems, Tel-com and IT, relocation/moving service providers, and many other move related items. This is where a seasoned project manager can add tremendous value saving time and money, keeping everything on schedule and handling any problems as they arise. Why risk exposure to additional costs, disruptions or unforeseen delays and headaches, not to mention the stress the inside person who was tossed the project manager hat will experience. Interview and select a Project Manager as part of the initial space planning process and the move experience (and costs), will be well worth the cost of a Project Manager.
TRUSTED. DEDICATED. EXPERIENCED.
Sale lease-backs can be a great option for your business. While many business owners feel that building ownership is right for them, a sale lease-back can provide financially-strapped companies with the capital injection they need. The transaction is simple: an owner/user sells the building to a third party investor, then leases the building back, often long-term. Equity in a building will generally see an appreciation equal to that of inflation (1-2%/year). A sale lease-back allows for a much higher return on equity by reinvesting the cash from the building sale back into the business itself; where owners can see a return much higher than 2%.
Want more information on sale lease-backs?
Is Your Physical Space
Helping or Hurting Your
Today, dozens of colleges in the Minneapolis/St Paul metropolitan area are pumping out graduates eager to find jobs as well as a great company to work for. While you might believe you have the right space to attract the best candidates, it might be a good time to step back and reflect on what you have to offer and what these graduates want so that when this fresh batch of interviewees sit down to talk, you know what your company’s commercial real estate space says about your company. Research shows, the current generation of graduates expect more from the companies they work for than generations of the past. This group values freedom, independence, and creative space. They view their office as a second home and they want to enjoy going there every single day. With the unemployment rate hovering around 3% and the knowledge that the average person will likely change jobs 12 times in their careers, you better believe your employees will find the work environment they are looking for if your company doesn’t have it.
Paramount recently represented a food distribution company, where the president expressed a desire for space that reflected the company’s culture. After considering several spaces that would have resulted in lower occupancy costs, leadership ultimately selected space that was more expensive but had amenities including a roof top patio overlooking the city that would allow their team to gather and test their product. For this company, it was critical that employees would interact with each other and their product on a regular basis and it was worth the extra expense to have a space that could support an outdoor grill area to make it happen.
So how do you make your space reflect your culture? Location, architecture, physical layout, furniture design, color, work spaces, and amenities are all aspects that can reflect your company culture. Today’s job seekers do consider these physical attributes when deciding where they want to work every day. So take some time and think to yourself; “does this space make me excited about working here? Does it embody the culture of the company? Is it functional? What aspects of your company’s space can be changed and altered to better reflect your culture and company goals? Some ideas you might consider: Health & sports enthusiasts might cause you to look for space close to biking trails, space with fitness facilities and showers, you might even add bike storage options. If you’re a creative marketing company you might try looking for unique architecture or a visually appealing space lay out. Maybe all you need to do is add a few tap beers, an air hockey table, and a flat screen TV to up the “fun” factor. Whatever you do, make sure you are consistent with your message regarding your company culture and appeal to the types of people you want to work for you.
Does Your Company Need New Space?