Artis Acquires $117M of Office, Industrial

MINNEAPOLIS-Artis REIT, based in Winnipeg, Canada, has completed $117 million in office and industrial transactions here. The company has purchased Stinson Office Park, and closed on the second tranche of a 25-property industrial portfolio, consisting of nine sites totaling 1.5 million square feet.

The 307,045-square-foot Stinson property is 97% leased to two tenants, Qwest Communications and Fairview Health Services. Artis bought the building, located in the Midway submarket of the Twin Cities, for $44.2 million from Eagle Ridge Partners.

Artis also spent $73.2 million on the nine industrial sites, which are collectively 88.5% occupied by a combination of office, flex, warehouse, distribution and light manufacturing tenants. AMB Property Corp. is selling its 25-property Minneapolis industrial portfolio, and Artis is scooping up the sites. Sources say Artis has already purchased 16 of the properties. The company is now one of the top five industrial landlords in the Twin Cities. CB Richard Ellis, which represented AMB on the deals, will continue to manage and lease the buildings.

Armin Martens, president and CEO of Artis, says that Minneapolis-St. Paul is the most logical choice for Artis to expand into the U.S. market, as it is similar to the firm’s home base of Manitoba. The company also had completed some development in the Twin Cities in the 1980s.

He tells GlobeSt.com that the market here has been steady, without the competition in the larger US markets. Martens also says it’s easier to invest in the United States than in Canada today. His firm has concentrated about 22% of the company’s 14.4 million square feet south of the border.

“The going-in yield for good quality product in the U.S. is better than that available for comparable Canadian product,” Martens says. “With the U.S. market being so much larger than Canada’s, the truth is sometimes we cannot even find that quality of real estate for sale in Canada, at any cap rate. We are also finding that the lenders are available with cost-efficient financing and that the overall spreads are quite attractive.”