(952) 854-8290 info@forterep.com

CASE STUDY

Forte Represents Interstate Companies, Inc. with the Acquisition of a 44,000 SF Office Building for its New Headquarters

Interstate Cos. Headquarters

Quick Highlights

  • Long-term history with the property
  • Real estate advisory services
  • Locate possible options for new corporate headquarters
  • Assist in purchase of property
  • Renovations of space
  • Corporate consolidation of employees

 

Overview

A 44,000 sq. ft., Class B, two-story office building has had a long history with the Forte team of Fred Hedberg, SIOR and Phil Simonet. Located in the Eagandale Business Park at 1340 Corporate Center Drive, Eagan, the property had been on the market for a substantial amount of time with space for lease.  At the time the Buyer and Forte approached the property, it was not on the market for sale but was considered a potential off-market opportunity given the right buyer.

The team’s history with the building goes back to 1996, when Fred Hedberg worked with Mycogyn Seeds to identify a location for an office headquarters. They identified 1340 Corporate Center Drive for the location, enlisting The Opus Group for the build-to-suit. It was Mycogyn Seeds’ headquarters until the company was sold to Dow Chemical in 2001. Hedberg and Simonet represented Dow Chemical and sold the property to Electronics for Imaging Inc., (“EFI”).  EFI renovated it in 2002 and sold it to Shree Eagan, LLC a local CRE investor, in 2020.

Challenge

Shree Eagan LLC purchased the property as a value-add acquisition with the goal of leasing the building to one or multiple tenants and retaining ownership of the property as an investor.  Covid-19 created a challenging office leasing environment and, as a result, no leasing had been completed in the property since the 2020 acquisition. In early 2023 Interstate Companies, Inc. was in the market looking to find a new corporate headquarters for its growing staff and future space needs.

Strategy

Upon a detailed discussion with Interstate Companies, Inc., about current market conditions, the history of the property including sale values, and a definitive pricing strategy to pursue the building, Interstate was able to successfully acquire the property for well below replacement value. Design of the interior space and construction should be complete by late 2023.  Interstate paid $3.7 million, which equates to $84.25 per square foot, for the property on 5.58 acres of land.

Results

“They will have more room than they can use immediately, but they are planning for the long term.  This building will allow them to consolidate corporate employees that have been spread out in multiple buildings into one building,” Hedberg said.  
Interstate Companies, LLC operates more than 50 business units in 37 facilities across 14 states in the Midwest, Rocky Mountain, West and Southwest regions, according to its website. Interstate, which was founded in 1957, focuses on distribution, sales and support of heavy-duty trucks; diesel engines; industrial bearing and power transmission products; industrial transmissions; power generation; transport refrigeration; and other products. Interstate also provides contract assembly services and industrial labor.

Learn more about the Twin Cities Office Market.

Real Estate Advisory

Forte Real Estate Partners recognizes that each client’s real estate needs are unique to their business.  Our experienced advisors understand clients’ objectives, anticipate potential challenges and work hard to exceed their expectations to provide solutions based upon our client’s best interests and current market conditions.

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Philip Simonet

Philip Simonet

Principal

o: 952-854-8381
c: 612-501-3870
phil.simonet@forterep.com

Fred Hedberg, SIOR

Fred Hedberg, SIOR

Senior Vice President

o: 952-854-8382
c: 612-382-8382
fred.hedberg@forterep.com

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