OWNERSHIP CYCLE OF A COMMERCIAL PROPERTY
WEST BLOOMINGTON BUSINESS CENTER: 6300 W Old Shakopee Rd, Bloomington, MN
The ownership cycle of commercial properties can be quite unique. 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 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 also had a good understanding of the market and kind 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. Whom laid out a building on the site that would meet current market demands for space. As well as a building that would meet the test of time.
Developing the Property
After reviewing financial projections prepared by Fred, a partnership formed to move forward with the project. Construction drawings, city approvals and financing were completed and secured. The general contractor selected for the new 80,714 SF project was Kraus Anderson. The project called West Bloomington Business Center.
Completing the Project
The partners hired Paramount Real Estate Corporation to lease and manage the building. In 1998, the shell building was completed and by the end of 1999 was fully leased and built out. 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. It 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 sold in August 2018. 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 have the opportunity to continue to work on this project in the future. See detailed information about the space currently available at West Bloomington Business Center.
Written by: Fred Hedberg
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