September 6, 2019- Hanley Investment Group Real Estate Advisors, a nationally recognized real estate brokerage and advisory firm specializing in retail property sales, announced today that the firm arranged the sale of Commons Plaza, a new-construction, retail property consisting of three freestanding buildings in Twin Cities metro area, Minnesota. The sale price was $11,780,000, representing the highest price per square foot and the lowest cap rate for a multi-tenant pad building above $10 million in the Midwest.
Hanley Investment Group Vice President Jeff Lefko and Executive Vice President Bill Asher represented the seller, Onecorp of Davie, Florida. The buyer, a private investor from Orange County, California, was represented by Steve Tucker of Tucker Investments in Corona del Mar, California.
“We were able to maximize value for the seller and achieve an above-list-price sale at a cap rate of 6.46%, which is the lowest cap rate for a multi-tenant pad building above $10 million in the Midwest and the highest price per square foot for a multi-tenant pad building in this price range at $861,” said Lefko.
Asher adds, “We procured a California-based 1031 exchange buyer the first day of formally marketing the property and negotiated a 14-day due diligence period with no financing contingency.”
Commons Plaza is located at 720-740 Commons Drive in Woodbury, Minnesota and features a brand-new, 2,926-square-foot freestanding Raising Cane’s with a drive-thru. Raising Cane’s is one of the fastest-growing quick-service restaurant chains in the U.S. and Nation’s Restaurant News ranked Raising Cane’s as the #1 “Chain in Sales-Per-Unit Growth” (2018).
Commons Plaza also includes a freestanding Sleep Number store. Sleep Number relocated from Woodbury Lakes to Commons Plaza to have better visibility and occupy a brand-new, 3,551-square-foot freestanding building on a hard corner, according to Lefko. Sleep Number has over 590 locations in all 50 states and is headquartered in nearby Minneapolis.
The other building at Commons Plaza is a two-tenant, 7,199-square-foot retail building that includes a 5,007-square-foot WellHaven Pet Health and a 2,192-square-foot Restore Cryotherapy. WellHaven has 41 locations in six states and plans to hit 150 locations by 2022. WellHaven offers both veterinarian services as well as daycare for dogs. Restore Cryotherapy has 29 locations open or under construction across 16 states.
Commons Plaza is located at the hard corner, signalized intersection of Radio Drive and Tamarack Road with 40,000 cars per day. According to Asher, Radio Drive is one of the most desired retail thoroughfares in Woodbury and a top choice for any national tenants that want to occupy space in the Twin Cities.
Tamarack Village, an 800,000-square-foot, super-regional shopping center, is located across the street from Commons Plaza and CityPlace, a newly constructed 100-acre master-planned retail/mixed-use development, is located directly behind the property at the southeast corner of Interstate 94 and Radio Drive. Tamarack Village is anchored by ALDI, Cub Foods, CVS/pharmacy, The Home Depot, Dick’s Sporting Goods, JOANN Fabrics and Craft Stores and Cabela’s. CityPlace is anchored by Whole Foods and Nordstrom Rack and includes 200,000 square feet of office and three hotels. Other tenants in the immediate area include HomeGoods, Trader Joe’s, ULTA Beauty, Bath & Body Works, Bed, Bath & Beyond, Michaels, DSW, Best Buy, Old Navy, Panera Bread and Starbucks.
Woodbury is one of the nation’s fastest-growing cities with 25% population growth within the last two decades and 8% projected growth over the next five years. More than 2,500 residential units and over 1.6 million square feet of commercial space have been permitted in the last five years in the area. Woodbury’s current population is approximately 71,306 (2018), according to the U.S. Census Bureau, making it the 9th most populous city in Minnesota. The average household income within a one-mile radius of Commons Plaza is approximately $140,000.
Money Magazine ranked Woodbury among “The 10 Best Places to Live in the U.S.” (2018) and Niche ranked the city the Top 5% in the nation for “Best Suburbs in America” (2019). Woodbury is part of the Twin Cities MSA, one of the strongest Midwest economies. The Twin Cities’ gross domestic product (GDP) is the 2nd largest in the Midwest behind only Chicago and the 13th largest economy in the nation.
In the last 12 months, Hanley Investment Group has sold 35 multi-tenant and single-tenant properties in the Midwest, most at record-low cap rates. Lefko and Asher earlier this year arranged the sale of the highest-priced Raising Cane’s to trade in the Midwest and lowest cap rate for a new single-tenant Raising Cane’s in the Midwest (above $5 million) in Coon Rapids, Minnesota. In Edina, Minnesota, Lefko and Asher arranged the sale of a new two-tenant pad property occupied by E*Trade and Roti Modern Mediterranean restaurant at a 6% cap rate, a record-low cap rate for a multi-tenant retail pad above $8 million located in the Midwest. It also represented the highest price per square foot all-time for a multi-tenant retail property located in Minnesota, according to CoStar Group.