Triple Net Acquiring Two Office Buildings

The Port Authority of St. Paul, represented by Jim McCaffrey with Colliers Turley Martin Tucker, sold the eight-story Gallery. The medical office building is connected by a skyway to St. Joseph's Hospital. "It's got low occupancy for a couple reasons. The authority may not have been as aggressive in leasing, and the hospital was rumored to be relocating," Prosky tells GlobeSt.com. Instead, the hospital recently announced an $80-million expansion that will include a 90-room patient tower.

The purchase is the first building in Minnesota for Triple Net, a subsidiary of NNN Realty Advisors Inc., based in Santa Ana, CA. Funding for the Gallery buy was provided by LaSalle Bank of Chicago, and arranged by Eric Tupler with CBRE/Melody. Leasing at the Gallery averages $14 per sf, net, says Prosky. The company is also under contract to buy the Northstar Center.

This is also the third property purchase under the company's NNN Healthcare/Office REIT Inc., which acquired its first two properties, Crawfordsville Medical Office Park and Athens Surgery Center (Crawfordsville) in Crawfordsville, IN and Southpointe Office Park and Epler Parke I (Southpointe) in the Southport community of Indianapolis on Jan. 22. Crawfordsville, located on the St. Clare Medical Center campus, consists of two one-story buildings, a medical office building and a surgery and imaging center. The property is master leased and 100% occupied by the Sisters of St. Francis Health Services Inc. of Perpetual Adoration. Southpointe consists of seven single-story medical office buildings totaling nearly 97,000 sf. The property is currently 96% leased to a mix of medical and office tenants.