Paramount Represents Seller in Plymouth Investment Sales Transaction
Fred Hedberg, Principal of Paramount Real Estate Corp was engaged in November 2020 by SJH Real Estate, a long-time client, to sell a NNN leased property it owned in Plymouth Minnesota. The owner of SJH Real Estate had recently concluded the sale of part of his business to SiteOne Landscape Supply LLC. SiteOne Landscape Supply LLC is owned by a publicly traded company that provides wholesale goods for green industry professionals. SiteOne has a market cap of $6 billion with over 500 facilities throughout the United States and Canada. As part of the purchase, SiteOne entered into a 10-year NNN lease with two-5 year options to extend for the property that was used to operate the business unit it had purchased. During negotiations, Fred advised SJH on the best way to structure the lease. He also advised on ways to maximize the value of the real estate and make it saleable in the future.
The property, located at 1205 Nathan Lane in Plymouth consists of 8.15 acres and a 17,580 square foot showroom/warehouse building. The property’s zoning allows for outside storage. Finding a property with zoning that allows for outside storage within the I-494/I-694 loop of this size is very rare and in high demand. The zoning, financial strength of the tenant, and the long term lease made this property very attractive to investors.
Paramount Real Estate Corp/TCN Worldwide started marketing the property For Sale on November 12, 2020. Fred contacted several local investment groups he thought might have an interest in this property. He received eight offers within two weeks, the majority of which were at full asking price or above.
Selecting a Buyer
The top five buyers were asked to submit their best and final offers. Three of the five buyers were at the same price or very close to the same price. The seller decided it would be in his best interest to close on a sale by December 31, 2020. Paramount advised the top three buyers to make one more final offer. They were also asked to provide evidence they could close by December 31. Upon careful review of the final offers and discussions with each of the buyers, one was selected.
Fred and the Seller selected a buyer they felt would have the best ability to close on the sale by year end. Both parties signed the purchase agreement on December 8, 2020 with a short due diligence period. All parties worked together to get an appraisal and environmental study completed in less than three weeks. Christmas even fell within that three weeks. The sale closed on December 30, 2020 and the property sold for $500,000 over asking price.
With a time from listing to close of less than seven weeks including holidays, this was an extremely fast transaction. As the real estate world gets more complex, most transactions are taking longer. This sale is an example of how complex real estate transactions can still be completed in a short time frame if all parties work together towards a common goal. It also demonstrates the strength of the Twin Cities investment sales market and investors’ appetite for good real estate with strong credit tenants and long-term net leases.
Written by: Fred Hedberg, Principal | Paramount Real Estate Corp | TCN Worldwide
Paramount Represents Seller in Plymouth Investment Sales Transaction
THE ECONOMIC OUTLOOK FOR CRE INVESTMENTS WITH DR. MARK DOTZOUR
We are proud to present this special TCN Worldwide webinar featuring Dr. Mark Dotzour. He is a frequent participant at TCN conferences and one of the truly ‘entertaining economists’ to provide an economic outlook and forecast for TCN members as well as their clients, prospects, friends, and family.
Join TCN Worldwide and Dr. Mark Dotzour as he discusses:
The outlook for job growth in the US.
Will the recovery be quick or prolonged?
What is the outlook for inflation in 2021 and beyond?
The outlook for borrowing rates
What is the outlook for cap rates?
What is the outlook for investor demand for US commercial real estate?
SPECIAL GUEST SPEAKER:
Dr. Mark G. Dotzour (CRE Economist)
Former Chief Economist and Director of Research at Texas A & M University
Dr. Mark G. Dotzour is a real estate economist who served for 18 years as Chief Economist of the Real Estate Center at Texas A&M University in College Station. He has given more than 1,450 presentations to more than 250,000 people. He has written over 90 articles for magazines and journals.
Dr. Dotzour makes complex economic issues easily understandable. Above all, Mark’s goal is to provide his audience with a “tool kit” of useful information that will help them make good business decisions. Ultimately, helping their families, their clients, and their company.
His research findings have appeared in the Wall Street Journal, USA Today, Money Magazine and Business Week. Similarly, his clients include banks, private equity firms, real estate investment trusts, construction firms, engineering companies, wealth managers, private foundations, and commercial and residential brokerage firms. In addition, he has made presentations to local and national trade associations all over America.
Special thanks to TCN Worldwide for hosting this webinar.
Questions? Call Paramount Real Estate Corporation.
SANTAMARIA ENTERPRISES EXECUTES 1031 EXCHANGE
Congratulations to Santamaria Enterprises & Paramount’s West Team for the purchase and closing of The Cliff Town Offices!
2805 Cliff Road or The Cliff Town Offices is a ½ acre, 8,420 SF multi-tenant office building. It is class B space consisting of 3 floors and built in 2004.
Paramount Real Estate broker, Jeffrey Swanson helped his client, Santamaria Enterprises, purchase this fully leased investment property as part of a 1031 exchange for the price of $1,100,000.00. The property closed on July 20, 2020 and Jeff will stay on to help with any leasing needs the asset will have in the future. Currently we have two newly renovated, 1,200 square foot suites available for lease.
For more details about the spaces available: Cliff Town Offices For Lease
Santamaria Enterprises recently sold a building in Minneapolis that included a night club owned by the landlord. The profits from this sale were rolled into this 1031 exchange, and were used to purchase the 2805 Cliff Road building. Paramount also represented them in leasing space in Richfield, MN. They use this space to operate their Latino radio station, La Raza. Tune in and enjoy the show on 95.7 FM!
EDEN PRAIRIE INDUSTRIAL BUILDING SOLD
Paramount Real Estate Corp | TCN Worldwide is very pleased to announce the Sale of 6450 Carlson Drive | Eden Prairie, MN
HISTORY OF THE PROPERTY
6450 Carlson Drive is a 42,760 multi-tenant office-warehouse building located off Highway 62 and Interstate 494. The Eden Prairie industrial building situated on 3.97 acres, was built in 1986. When a long term tenant vacated the majority of the building, Paramount was engaged to market the property. Initially they marketed it as a 36,885 square foot vacancy For Lease.
PARAMOUNT’S CLIENT & THE DEAL
Bloomington-based Paramount Real Estate Corporation brokers, Jeffrey Swanson, Associate and Fred Hedberg, President represented the seller in this transaction. FHM Partners, the sellers, consist of a local managing partner and two out of state passive owners.
“This Eden Prairie industrial building was on the market For Lease. We were in the midst of negotiating a 10-year lease for the building’s vacant space. This is when a user/buyer made an unsolicited offer to purchase the building. Paramount advised FHM Partners on the pros and cons of each opportunity. The partners decided that it was in their best interest to sell. The transaction moved forward quickly with only a slight delay due to a change in financing that pushed the closing out 10 extra days,” commented Jeff Swanson.
THE NEW OWNER
BLCKGLD, LLC, a Minnesota owned LLC, is the entity that recently purchased this office-warehouse building at 6450 Carlson Drive. With their upcoming expansion, a company with common ownership to BLCKGLD, LLC plans to remodel and occupy the entire building.
In conclusion, Paramount congratulates the West Team for closing on this deal!
REAL ESTATE TIP: CHOOSING THE RIGHT COMMERCIAL REAL ESTATE BROKER
Would you buy a car from a boat deal? Let your barber clean your teeth? Perform your own surgery? Of course you wouldn’t. You want the people who you work with to be professionals and experts in what they do. So why would you go into the commercial real estate market without professional help?
Commercial real estate brokers are trained and licensed professionals. They all have geographic expertise, specific real estate product knowledge, and different negotiating styles. When you are ready to go out and find property to lease, buy, sell, or invest in, your best bet is to interview a number of brokers to find the best fit for you.
Here are some questions you should ask real estate professionals to clearly understand if they can add value to your situation:
What product type do you specialize in?
What is the geographic area you focus in?
How long have you worked on this type of transaction?
Can you tell me about another client with similar needs that you helped in the past?
Do you work alone or with a team?
What is your communication style?
Do your homework and make sure you have a broker who knows the type of space you are looking for inside and out.
“Isn’t it cheaper to lease or buy space on my own?”
People always ask me “Isn’t it cheaper to lease or buy space on my own?” No, is the answer most of the time. Any broker you interview should be open and transparent with how they will collect their fee. The industry has a standard commission for each product type, so make sure the brokers you are interviewing all tell you the same thing. Typically, the broker commission is paid by the landlord or seller when leasing or buying an owner/user building. In addition, your trained professional will help you avoid pitfalls. These could include; paying over market rents, getting locked into a larger term than you want, and even having to pay to build-out new space yourself.
Do yourself a favor and let a professional help you with your space needs. It will save you time, worry, and in the end, MONEY.
AJ Chivetta doesn’t hesitate: Crowdfunding is changing the way people can invest in commercial real estate. And because of this, the number of people investing in commercial real estate through crowdfunding will only grow in the coming years, he said.
Chivetta should know. He’s a founder and chief executive officer of Selequity, a St. Louis-based company that helps investors place their dollars in commercial real estate properties across the country. He’s seen up-close just how eager consumers are to invest in commercial real estate properties that were formerly out of their reach.
“Crowdfunding solves problems for both sides of the commercial real estate transaction,” Chivetta said. “Investors are looking for opportunities to invest in real estate. They are looking for the kind of yields that real estate has long afforded people, especially in low-interest-rate environments. Real estate owners and operators are always looking for new investors and capital.
“With crowdfunding, more investors can gain access to commercial real estate, and owners can attract capital from a greater number of people,” Chivetta said.
Continue reading Commercial real estate crowdfunding is here to stay, say the industry’s pioneers.
Written by Dan Rafter, REJournal.com.