FedEx Plans New $20M Facility in Maple Grove; Life Time Fitness Extends Lease at Target Center

By Gabriel Circiog, Associate Editor

FedEx is planning to build a new $20 million sorting and distribution center in Maple Grove. The new 276,400-square-foot facility is expected to open in 2014 and will replace the smaller facility FedEx leases in Brooklyn Park for its SmartPost business, The Minneapolis / St. Paul Business Journal reports.

FedEx SmartPost, a subsidiary of FedEx, has been growing in recent years and plans to expand its capacity by 80 percent in the next five years. Its current facility, the Crosstown building located at 7500 Setzler Parkway North, features 120,000 square feet of warehouse and distribution space.

Although FedEx has not announced yet how many jobs it will have at the new Maple Grove site, the company plans for 332 employee parking spaces. Located at 9997 85th Ave. North, the 42-acre site is close to Interstate 694 and Highway 81. Erin Truxal, a spokesperson for FedEx Ground said that the site was chosen due to its easy access to major highways, strong local workforce and proximity to customers’ distribution centers.

In other local news, the StarTribune reports Life Time Fitness has extended its lease at the Target Center and plans to invest millions of dollars in renovating the gym. Life Time Fitness has signed a 12-year extension on its lease, which was set to expire at the end of February. The agreement stipulates that the lease is automatically extended to 2028, as long as the Minnesota Timberwolves’ lease at the city-owned Target Center extends beyond 2025.

Photo Courtesy of: www.artisreit.com

KBS REIT III Acquires 40-Story RBC Plaza for $118.1M

By Gabriel Circiog, Associate Editor

KBS Real Estate Investment Trust III recently announced the acquisition of the 678,045-square-foot RBC Plaza. The Newport Beach, Calif.-based public non-traded REIT purchased the downtown Minneapolis mixed-use office building for $118.1 million (net of closing credits).

Located in Minneapolis’ financial district along Nicollet Mall at 60 South Sixth St., the 40-story RBC Plaza features 609,368 square feet of office space and 68,677 square feet of retail and amenity space on top of an underground parking structure. The retail component of the building is located on the first four floors of RBC Plaza and is connected via skywalk to a multi-building retail complex spanning two city blocks.

The seller, Brookfield Office Properties, was represented by Tom O’Brian and Terry Kingston with Cushman & Wakefield/NorthMarq and Mike Winn and Tim Richey with Cushman & Wakefield/Denver. KBS has hired Cushman & Wakefield/NorthMarq to manage and lease the asset, effective Feb. 1, 2013. Sonja Dusil will lead the leasing efforts, and Theresa Elveru will lead the property management team.

Rodney Richerson, KBS regional president, said: “We believe we have a great opportunity to convert some of the upper-level retail floors into creative office space, along with creating a primary entrance off of Nicollet Mall and improving the overall retail mix. In addition to these improvements, we anticipate adding stronger office amenities, conference rooms, a fitness facility and some lobby renovations that will cost approximately $3 million.”

As previously reported by Multi-Housing News, another KBS-affiliated company recently acquired another property in the greater Minneapolis area: Watertower Apartments, a 228-unit mixed-use apartment community in Eden Prairie.

KBS Closes on Acquisition of 228-Unit Eden Prairie M-U Community

By Gabriel Circiog, Associate Editor

Newport Beach, Calif.-based KBS Legacy Partners Apartment REIT has closed on its first acquisition of 2013: Watertower Apartments. The 228-unit mixed-use community, located in Eden Prairie, Minn., is situated close to I-494 and Highway 212 and just 16 miles southwest of downtown Minneapolis. The non-traded real estate investment trust is sponsored by KBS Capital Advisors L.L.C. and Foster City, Calif.-based Legacy Partners Residential Realty L.L.C. KBS currently owns a total of 1,980 apartment units in Minnesota, Texas, North and South Carolina, Illinois and Maryland.

Watertower Apartments was 94 percent occupied at the time of the acquisition and offers 228,775 square feet of mixed-use space in two adjacent structures. The three-story building features 28 residential units and 10,065 square feet of ground-floor retail space, while the four-story building features 200 apartment units above a two-level underground parking garage.

“We are very pleased to add Watertower Apartments to the KBS Legacy Partners Apartment REIT portfolio,” said W. Dean Henry, the REIT’s CEO. “The property boasts location, amenity and design advantages that we believe rival anything in the greater Minneapolis market.”

In other local real estate news, the StarTribune reports the signature Kellogg Square apartment tower in downtown St. Paul has been sold by Sentinel Management for $51 million. Golden Valley-based Bigos Management bought the tower, increasing its Twin Cities apartment portfolio, which currently features more than 42 owned or managed apartment communities.

Located at 111 E. Kellogg Blvd., Kellogg Square, built in 1970, has 450 apartments and features commercial space and a parking structure with 594 stalls. Sentinel was represented in the deal by NAI Everest.

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Photo Courtesy of: www.watertowerapts.com

$78M Duluth Airport Terminal Opens for Passengers

By Camelia Bulea, Associate Editor

After more than four years in the works, a new passenger terminal at Duluth International Airport has opened. The new state-of-the-art facility cost $78 million to build and features lots of glass and natural light.

The terminal is characterized by a glass-fronted wall rising 40 feet, with a roof imitating the shape of a wave. The passenger concourse can accommodate more than three times the number of passengers the old waiting area could, allowing 400 passengers to board their flights, according to the Duluth News Tribune. “There’s a lot of volume, and it’s grand,” said Elizabeth Samsa of TKDA, the lead interior designer.

Samsa added that warm wood tones were used on wall panels and portions of the ceiling to balance the natural light. The new design was meant to create a warmer airport than the old one, which was built in 1973.

Next month, developers will start demolishing the old terminal, which sits behind the new one, in order to make way for more aircraft parking. The parking ramp project, which is expected to be completed in the fall of 2013, is part of the $78 million project cost.

The project was entirely financed with federal grants and state bonding money.

The designer, Reynolds, Smith & Hill, sought LEED Silver certification for the 110,000-square-foot terminal, which features sustainable green energy elements like geothermal heating, natural lighting and a highly efficient water system. The general contractor was Minneapolis-based Kraus-Anderson Construction Co.

Photo of the new terminal at Duluth International Airport: Bob King of the Duluth News Tribune, rking@duluthnews.com.

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Sears Plans Major Redevelopment Project at St. Paul Site

By Camelia Bulea, Associate Editor

Developers announced big plans for the site surrounding the St. Paul Sears store near the State Capitol. Sears’ redevelopment plans call for new retail, an office building and residential space.

According to Finance & Commerce, the redevelopment of the 14-acre site on Rice Street will include the following:

-          An additional 111,700 square feet of retail space in four separate buildings attached to the south side of the existing Sears building;

-          121 apartments and 18 townhomes in the northwest corner of the property;

-          A four-story, 112,000-square-foot office building;

-          A 586-space parking ramp.

The project will be built in three phases, with retail space built in the initial phase, followed by the office property and parking garage. The site, now home to 700 parking spaces, is located south of the Central Corridor Light Rail Transit line, which is considered to be a catalyst for new development in the area, Cecile Bedor, city planning and economic development director, told the Pioneer Press.

The plan will go before the state’s Capitol Area Architectural and Planning Board for design concept approval on Jan. 16, the Twin Cities publication reported.

In other interesting news, Nordstrom Inc. announced plans to open a full-line store at Ridgedale Center in Minnetonka. The new store will be approximately 138,000 square feet and is scheduled to open in fall 2015. This will be the second full-line store in the Twin Cities for the Seattle-based retailer.

Image rendering of the Sears redevelopment project courtesy of the city of St. Paul, via Pioneer Press.

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