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FARGO, ND-After researching the local office market, Lexstar Development and Construction has changed its plans for Capital Square, a collection of office buildings here along 43rd Street S., between 15th and 17th avenues south. The company bought the property about four months ago, and had planned five buildings that included two seven-story facilities. However, the rates worked out to just a little more than the market could bear, says a company spokesman.

“We did some studies, and the lease we were thinking of asking, $17.50 to $18.50 per sf, is a dollar or two higher per sf than what’s possible here,” the spokesman tells GlobeSt.com. “So we scrapped the whole project and reworked the entire site.”

The new plan is still made up of five buildings, but the make-up is different. The site will have two one-story buildings of 15,000 sf each, and three two-story buildings of 30,000 sf each, for just more than 120,000 sf total. At least one building will have underground parking, the spokesman says. “It should cost about $17.5 million to build,” he says. The offices will be offered for $13.50 to $14.50 per sf, he says. Construction will begin in July, and the first building will be up by April 2009, the spokesman says. No tenants have been signed yet.

As the office market goes in the deep Midwest, Fargo doesn’t do that bad. Microsoft leases about 400,000 sf in the city, and other office users have followed the software company. “Demand is good here,” says the spokesman. “The Midwest is still thriving, and we have a lot of high tech users here in town. We have three colleges in the area (with about 40,000 students), and North Dakota State University has a business incubator that’s very successful. It’s not like there’s a waiting list to get in, but commercial business is very good.”

He says his company decided to build in the West Acres Business Park because it’s the last undeveloped acreage in the business section. “Everything is already mature around it, and it has a thriving retail and financial district. We’re in the heart of the business sector for the area,” the spokesman says. The company also developed and manage the tallest building in the flat area, the seven-story Multiband Tower.

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