Press Release | Powell Represents OffiCenters in Lease Renewal at North Loop

MINNEAPOLIS, MN.  Nancy Powell, Vice President at Paramount recently assisted our long-term client, OffiCenters in a lease renewal at their North Loop location in Minneapolis.  Lori, the founder and CEO of the locally held co-working and executive office sharing solutions corporation, is not daunted by the influx of co-working competitors, in fact she says bring it on!  For 35 years they have brought office sharing solutions to Minneapolis and St. Paul.
With 5 locations, OffiCenters offers nearly 100,000 square feet of office space solutions.  They focus on the needs of their customer, OffiCenters is not afraid to relocate to find the right space solution.  In fact in the past few years, Nancy has assisted them in relocating three of their centers.

Ownership Cycle of a Commercial Property

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
(952) 854-8290

CoWorking Phenomenon

CoWorking Phenomenon
by a Twin Cities Industry Professional

The CoWorking industry has taken the world by storm. In 2005, there were only 3 verified CoWorking spaces in the entire world. And as of 2017, that number had skyrocketed to a staggering 15,000 and that number is slated to double by the end of 2018. These figures are a testament to the rise in digital workplaces and remote working.
I just came back from our Global Workspace Association conference in Austin, Texas and came away with a few interesting facts:
In July and August 2018, 306 new CoWorking centers were opened worldwide.  169 being in the United States.  The number of new CoWorking locations are estimated to grow to almost 1,000 in the U.S. by the end of 2018.  At the end of 2017, 44% of coworkers were female.  By the end of 2018 that number will grow to almost 50% of coworkers being female.  By the end of 2019, there will be approximately 1 million people coworking.
But CoWorking is not just for small businesses anymore.  Global companies are using flexible space solutions as alternatives to taking or building their own workspaces. They are turning to large CoWorking companies like WeWork to house entire divisions of a company for special projects or teams, and in some cases entire divisions of a company.  Studies providing workspace is expensive and can tie up capital.  CoWorking can reduce their liabilities and long-term commitments by using flex space providers to house their workforce.  Instead of CoWorking communities growing by one or two people at a time, large companies will place 40 or 50 people in a workspace and as many as hundreds of people at one time or over a short period of time.
These facts tell us that the workspace has changed dramatically.   Particularly since trends in entrepreneurship and the evolution of the home based business has changed not only how work is done but also where work is done.  In addition, technology has played a large part in the ability for workers to use the Internet to work anywhere they choose. CoWorking supports businesses by offering flexible workspace solutions, short term space commitments and the economies of sharing facilities and staff.  In short, flex space and CoWorking works!  Not just for small businesses but for every business.
“Life is short.  Work someplace awesome!”
My background as a CoWorking service business started in 1981.  I have seen the workspace evolve and change dramatically.  In our early days, we looked for usually “one guy” to take a permanent private office.  The offices looked very similar in that they had a basic desk, credenza, chair and a couple of side chairs.  That format worked for years. And then technology took the lead.  Computers and the internet allowed people to communicate at a different level.  Email changed correspondence norms and encouraged less paper and mail costs.  The pace of workspace became lightning fast, no more worrying about the fax machine or document delivery.  Our target clients are road warriors who carry their office wherever they go whether it is home, auto, hotel or designated workspace.
Technology changed the definition of work.  Today almost 90% of businesses created are home based.  And home can be an excellent place to work:  the dress code rocks, the commute is non-existent, and the economics for a small business make sense.  But many people found home is not ideal for those who find distractions a challenge.  The number one complaint of businesses that work from home is isolation.  There is just no interaction with like-minded professionals or coworkers hanging out at the coffee station or the water cooler.  That is where CoWorking hits a home run.
At OffiCenters we have conquered the isolation of entrepreneurial workers.  Our workspaces push beyond four walls and include over 1,200 members in our community.  We offer not just the space to work but options on collaboration and business challenges.  We have networking groups, educational seminars, community outreach and charitable events, and mostly opportunities to meet the five generations of members in our workspaces.  In my over 30-year career in workspace as a service, it has never been so exciting.
A recent survey of OffiCenters’ members (August 2018) showed 100% found our spaces conquered their isolation problems.  81% of members have made critical professional bounds within our community.  83% feel that joining a CoWorking community makes them more productive.  78% say they have increased their bottom line since joining OffiCenter. These are powerful numbers and we are proud to influence our community to success.   We really emphasize working within our own community and for members to buy from one another whenever possible.
Over the last 8 years we have completely remodeled our workspaces to include not just single private offices but more meeting and conference room choices, team spaces, collaborative workspaces and 60 seat open areas in all of our locations.  Our CoWorking spaces have a coffee shop type of environment only with a more professional feel and a lot better Wi-Fi connections.
OffiCenters has 7 locations in the Twin Cities area, which include:  Bloomington, Edina, Minnetonka, St. Louis Park, Woodbury and the Minneapolis North Loop.
If you or anyone you know would like to try CoWorking,
please call us at (612) 349-2700 for a free day pass.

Lori Spiess, Founder of OffiCenters
Lori Spiess is the Founder of OffiCenters and has provided workspace solutions to the Twin Cities since 1981.  She is an innovator; leader and motivator who help businesses do their best work. She was the first woman President of the Global Workspace Association (GWA).  Her company won Most Innovative Workspace 2014 and she made Minnesota Real Power 50 list in 2015.  Spiess, a recent cancer survivor, has a new motto: Life is short.  Work someplace awesome! 
You can view her location at https://officenters.com/.

 

MNCAR Retail Market Trends – Minneapolis-St. Paul (2018-Q4)

RETAIL MARKET TRENDS | Q4 2018 | Mpls-St. Paul
Economic Overview
According to the Bureau of Labor Statistics (BLS), the unemployment rate for the Mpls-St. Paul metropolitan statistical area (MSA) decreased 50 basis points from 2.5% in November 2017 to 2.0% in November 2018. The unemployment rate for the U.S. was at 3.8% in October 2018, up from 2.8% for the State of Minnesota.  The Mpls-St. Paul MSA saw an increase in retail job growth, leisure and hospitality growing by 3,600 during the same period.
Market Overview
The Mpls-St.Paul retail market, consisting of over 89 msf of space in seven counties across the metro posting an availability rate of 6.6% for Q4 2018.  The vacancy rate for the market stands at 5.9% to close out 2018.  The average asking lease rate for Mpls-St. Paul came in at $18.01 psf NNN. To date, there are over 34 construction projects throughout the market, totaling just over 768,000 sf.
Market Highlights
At the close of Q4 2018, the market experienced over 344,000 sf of leasing activity and the vacancy rate finished the year at 5.9% in total and the Southwest market posting the lowest rate at 4.5%. The top five lease transactions accounted for over 135,000 sf throughout Mpls-St. Paul with the largest leased space for Hobby Lobby leasing 61,000 sf.
READ ENTIRE REPORT: Q4 2018 – Retail Market Trends
Written By: MNCAR/Redi Comps

Is a Sublease Space Right For Your Company?

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.
Space Planning:
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.
(952) 854-8290

MNCAR Office Market Trends – Minneapolis-St. Paul (2018-Q4)

OFFICE MARKET TRENDS | Q4 2018 | Mpls-St. Paul
Economic Overview
According to the Bureau of Labor Statistics (BLS), the unemployment rate for the Mpls-St. Paul metropolitan statistical area (MSA) decreased 50 basis points from 2.5% in November 2017 to 2.0% in November 2018. The unemployment rate for the U.S. was at 3.8% in October 2018, up from 2.8% for the State of Minnesota.  The Mpls-St. Paul MSA saw an increase in office job growth, professional, financial and information growing by 6,600 during the same period.
Market Overview
The Mpls-St.Paul office market, consisting of over 95 msf of space in seven counties across the metro posting an availability rate of 16.5% for Q4 2018.  The vacancy rate for the market stands at 14.6% to close out 2018.  The average asking lease rate for Mpls-St. Paul came in at $24.29 psf FSG. To date, there are over 12 construction projects throughout the market, totaling just over 2.2 msf.
Market Highlights
At the close of Q4 2018, the market experiences over 1.3 msf of leasing activity and the vacancy rate finished the year at 14.6% in total. Class A properties ended the year at 11.8% with the Mpls CBD Core market posting the lowest rate at 9.7% for class A properties. The top five lease transactions accounted for over 342,788 sf throughout Mpls-St. Paul with the largest leased space for Tactile Systems Technology leasing 100,000 sf in the West market.
READ ENTIRE REPORT: Q4 2018 – Office Market Trends
Written By: MNCAR/Redi Comps

MNCAR Industrial Market Trends – Minneapolis-St. Paul (2018-Q4)

INDUSTRIAL MARKET TRENDS | Q4 2018 | Mpls-St. Paul

Economic Overview
According to the Bureau of Labor Statistics (BLS), the unemployment rate for the Mpls-St. Paul metropolitan statistical area (MSA) decreased 50 basis points from 2.5% in November 2018. The unemployment rate for the U.S. was at 3.8% in October 2018, up from 2.8% for the State of Minnesota.  The Mpls-St. Paul MSA saw an increase in industrial growth in manufacturing growing by 6,900 during the same period.
Market Overview
The Mpls-St.Paul industrial market, consisting of 119 msf of space in either counties across the metro posted an availability rate of 11.4% for Q4 2018.  The vacancy rate for the market stands at 8.2% to close out 2018.  The average asking lease low rate was $5.82 and high rate was $9.00 NNN for Mpls-St. Paul.  To date, there are 17 construction projects throughout the market, totaling just over 209 msf.
Market Highlights
At the close of Q4 2018, the market experiences over 1.9 msf of leasing activity and the vacancy rate finished the year at 8.2% in total with the Southeast market posting the lowest rate at 7.0%.  The top five lease transactions accounted for over 490,797 sf throughout Mpls-St. Paul with the largest leased space for Asmodee North America leasing 130,000 sf.  Northeast warehouse distribution increased to 15.7% vacancy from 11.3% due to new deliveries totaling 468,188 sf.
READ ENTIRE REPORT: Q4 2018 – Industrial Market Trends
Written by: MNCAR/Redi Comps

Real Estate Tip of the Week-9.27.2018

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.
(952) 854-8290

TCN Worldwide 7th on NREI 2018 Top Ten Broker’s List

TCN Worldwide is honored to be named once again in the Top Ten of the National Real Estate Investor Top Brokers List for 2018; ranking 7th as one of the leading brokerage organizations in the industry.
TCN Worldwide Real Estate, a consortium of independent commercial real estate firms, provides complete integrated real estate solutions locally and internationally. An extensive range of real estate services coupled with a personal commitment to exceed expectations is what allows TCN Worldwide to be a leader in this competitive industry.  Comprised of leading independent brokerage firms, serving more than 200 markets globally, TCN Worldwide combines an entrepreneurial approach with years of local experience.  Around the globe, across all property types and service groups, TCN Worldwide’s more than 5000 brokers and salespeople have a well-earned reputation for providing straightforward expert advice.
See the complete list here:  https://www.nreionline.com/brokerage/2018-top-brokers?full=1

 
 

Real Estate Tip of the Week-9.14.2018

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.
(952) 854-8290