3PL Holdings Buys 312,800-SF Warehouse

ST. PAUL, MN-A logistics firm, 3PL Holdings LLC, has purchased a 312,800-square-foot warehouse building here at 1700 Wynne Ave. for less than $10 million. The company purchased the facility in a sort-of sale-leaseback transaction. Minnesota Diversified Industries had owned and occupied the entire building, but decided to sell and lease back just 31,000 square feet. Companies affiliated with 3PL will occupy the rest of the facility.

Paramount Real Estate Corp./TCN Worldwide, based in Bloomington, represented the buyer on the deal. Phil Simonet, a principal with the company, says the clear heights and the location, in the middle of the Midway market between St. Paul and Minneapolis, is what attracted the buyer. “The third-party logistics industry is relatively strong. When the economy gets tough, companies tend to outsource that business, because it’s cheaper. Plus, it’s a more flexible option, the user can ask for 50,000 more square feet, say because it’s Christmas and they have more product, and it’s easier to get that from a 3pl than having to lease or buy more space.”

He says he can’t comment on the lease that MDI is paying, but says the average rate in the area for warehouse space is $4 to $8 per square foot. The company specializes in plastics manufacturing, packaging and assembly. “They hire and train people who have physical and cognitive limitations, so it was important for them to keep a presence in St. Paul,” Simonet says.