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ST. PAUL-Triple Net Properties LLC has confirmed that it purchased the 105,000-sf Gallery Professional Building here, and is under contract to buy another office building, the 813,000-sf Northstar Center, in Downtown Minneapolis. The company bought the 69%-occupied Gallery for $8.8 million, says a company official. “We have a bunch of money set aside for tenant and capital improvements, and are going to aggressively lease it up,” says Dan Prosky, managing director of the company’s Health Care Properties.

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.

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