Case Study

120,000 sf Industrial Building Sold in St. Paul

executive summary

The Forte Real Estate Team successfully sold a 120,000 square foot industrial building in St. Paul’s North End. The transaction was complicated by multiple offers, environmental concerns, and some functional obsolescence in the building.
Midwest Sign & Screen Printing Supply was founded in 1932 in Saint Paul, MN. Bill Anderson began his career at Midwest Sign as a clerk-typist in 1961. He became the president and owner in 1979. Soon Midwest had multiple locations in many cities west of the Mississippi River. Tragically, Bill died of cancer in 2004 leaving a grieving wife and two sons, Paul and Luke. Bill’s wife, Nancy, describing herself as a “reluctant CEO” continued to grow the business by adding a new location and expanding product lines. All the while, Paul and Luke were growing into adulthood and began working in the business eventually achieving management positions which were integral to business operations.

With the rise of e-commerce and expanding competition, the Andersons sold the distribution business in 2020. Early in 2021 a decision was needed regarding what to do with the 120,000 square foot building and surrounding acreage in Saint Paul’s North End.  Through a common Midway Chamber of Commerce connection, Julie Novak with Bank Cherokee, Nancy, Luke, and Paul were introduced to John Young.   

Over the course of several months, the Andersons met with the Forte team of John Young, Phil Simonet, Joe Schultz, and Jack Buttenhoff. Each meeting included detailed presentations from the Forte Team about market trends, lease rates, capital improvement costs, cash flow, and likely outcomes for both selling and leasing the building. After reviewing all the material prepared by Forte, the Andersons decided to sell the building, and the Forte Team was the right team to sell it.  

The Forte Team publicly listed the building on July 1, 2021. Activity on the listing was strong with many showings and a lot of interest from the marketplace. On August 9, 2021, the first offer was received with two more following closely behind. After trading counter offers with each potential buyer, the Andersons and Forte jointly determined that a “best-and-final” round of offers from each buyer was appropriate. The “best and final” offers were required to address price, due diligence, and how the buyer proposed to address environmental concerns that might arise.  

The clear winner in the best-and-final round was Michel Sales, a Minneapolis-based company that began its operations 100 years ago just a couple of miles from 45 Maryland. They had been a long-time client of Phil Simonet, one of the Forte Team members hired to market and sell the building. Both buyer and seller consented to dual agency and Forte representing both parties. At this point in the transaction, it would seem to be smooth sailing. However, one of the other potential buyers came back to the Forte Team and dramatically increased their offer. After much discussion, the Andersons decided that a “best-and-final” offer meant best-and-final, and Michel Sales was the clear winner. This decision, full of character and integrity, paid off later in the transaction when Michel Sales agreed to assume responsibility for an environmental matter and replacing a roof section that was clearly at the end of its useful life.

In a world where people fight for every dollar and negotiate aggressively to get the upper hand, the Andersons chose the high road and it paid off for them and for Michel Sales who closed on the building in December 2021.

John Young
Written By:

john young, ccim

Vice President | Real Estate Advisory

952-854-5067

John.Young@ForteREP.com

 

 

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