Sale Leaseback Experts Spending $380M on Minnesota
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MINNEAPOLIS—The local commercial real estate market here isn’t known nationally for any major boom times when asset prices significantly skyrocketed. But that’s OK with United Trust Fund (UTF), which is looking to place $380 million in sale-leaseback transactions in the state over the next year.
Minnesota is seen by UTF executives as stable. And they point out that while its commercial real estate market doesn’t experience many booms, it also doesn’t suffer as badly through downturns, either.
“Historically, Minneapolis and Minnesota have had less drastic fluctuations than they have had in the boom states, such as Arizona, Texas, Florida and California,” Sidney Domb, president of Miami-based UTF, tells GlobeSt.com.
UTF understands the importance of stability as they have been doing sale leasebacks longer than any other firm. That’s not to say that there aren’t big companies in Minnesota with which to do business. Several larger corporations have operations in the state, especially the Minneapolis-St.Paul area, which UTF will target. Some of UTF’s successful sale leasebacks in Minnesota include Best Buy, Target, General Mills, United HealthCare, Chrysler, Ceridian (formerly Control Data Corp.), fireplace manufacturer Hearth & Home Technologies and many operations of Honeywell, which used to have its headquarters in the state. In addition, UTF purchased and leased back 36 restaurants and 42 bank branch buildings.
In fact, the company did its first-ever sale leaseback in Minnesota, in 1972, and since then has completed more than 100 deals in the state. UTF is currently seeking out owners and brokers throughout the state to work with.
Besides the stability it provides and the large companies that call it home, UTF management is also a fan of Minnesota’s economic diversity.
“You have a concentration of a lot of companies in a variety of industries, so if one industry were to get hit at one particular time, you have another industry that may be able to pick up the slack,” Domb says. “You’ve got technology, insurance, grocery, a variety of industries that are doing quite well. There is a lot of diversification there.”
Outside Minneapolis-St. Paul, UTF is considering transactions in the Rochester area, where it has mostly done industrial deals in the past. Medical acquisitions would be particularly attractive as the company has purchased $300 million of MOB and two hospitals over the past three years, Domb points out.
For more UTF news, click here to see what the firm is up to in Texas.
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