MINNETONKA, MN-Adaje Development has sold a fully-leased, 70,000-square-foot office here at 12301 Whitewater Dr. for $9.6 million to Upper Midwest Management Corp. The property, near the intersection of Interstate 494 and Highway 62, is 100% occupied by North American Membership Group Inc., a lifestyle affinity company.
In 1986, Trammell Crow developed the 6.5-acre property, which abuts the Nine Mile Creek Watershed and protected wetlands. NorthMarq Investment Services, based in Minneapolis, represented the seller in the deal. Scott Pollock, SVP, tells GlobeSt.com that the Adaje prefers to own multi-tenant properties. “We’re looking to execute a 1031 exchange with this sale,” Pollock says. “This is a good property, the tenant just signed an eight-year lease. It’s very easy to get to from I-494, and the area has a lot of amenities.” He says this type of building, a high class B, leases for an average of $12 per square foot.
The building is in the 110-acre Minnetonka Corporate Center office park, with other tenants that include companies such as Cargill. “This is a strong headquarters location, a lot of businesses choose to be in this part of town, and the area has good, quality housing,” Pollack says. The local market, however, has 15.6% vacancy, and had negative absorption at the end of the year, he says. “Some new buildings were delivered in the market, that caused the negative numbers. Still, this is the largest suburban submarket in the Twin Cities.”
The economy presented more of a challenge for the sale than expected, Pollack says. “We got lucky, the buyer had purchased a sister property to this that Trammel Crow had done in Eagan, the two sites had even traded together on a couple of occasions. The owner also wanted to be in this part of town, they didn’t have a presence here, so this was a good fit for them,” he says.