Just Sold: Hoyt pays $6.5 million for Fridley flex buildings

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Editor’s note: “Just Sold” is a Finance & Commerce feature based on certificates of real estate value recently filed for commercial transactions and significant residential transactions in Twin Cities counties. Additional details in the transactions come from Plat Research, the Minnesota Secretary of State’s Office, company documents, online real estate listings, F&C archives, CoStar and other research. Some purchase prices and per-unit calculations have been rounded. Full prices are available on the CRVs posted here.

5155 and 5201 E. River Road NE, Fridley

Less than a year after paying a California pension fund $6.3 million for two buildings in the River Road Business Center in Fridley, veteran real estate investor Steve Hoyt and his partners have paid $6.5 million for the remaining two.

The buyer, MSP Fridley Industrial Buildings III and IV LLC, is a 50-50 partnership between MLG Capital, a Brookfield, Wisconsin, investment company, and Forum Equities LLC, a private equity fund including Hoyt and other Minnesota investors. Hoyt, president of Minneapolis-based Hoyt Properties, declined to say how much equity he has in the deal.

The partnership closed Dec. 14 on the acquisition, according to a certificate of real estate value made public Monday. The seller was FirstCal Industrial 2 Acquisition LLC, an entity of CalSTRS, the Sacramento-based California State Teachers Retirement System.

The deal includes River Road Business Center IV, a 70,000-square-foot, Class C flex building at 5155 E. River Road NE and River Road Business Center III, a 50,000-square-foot flex building at 5201 E. River Road NE. The properties, built in 1986, share a 5.6-acre site along the east bank of the Mississippi River. The local partners closed in May 2015 on buildings I and II, located at 5301 and 5255 E. River Road NE, respectively.

“We knew it would be available and we just waited until it was available,” Hoyt said. “We own the other two, so this gives us the only multi-tenant space in that submarket,” he said.

The center has a total of about 270,000 square feet of space, with a mix of 25 office, manufacturing and warehouse tenants that includes DaVita Healthcare Partners Inc., Dental Technology Group, Resolution Medical and Espresso Partners. Buildings III and IV are 87 percent leased, with just one space available. The first two buildings were only 60 percent leased when acquired, but one tenant expanded and Hoyt brought in another, boosting occupancy to 80 percent, he said. The price for the final two buildings works out to $54.38 per square foot.

Minneapolis-based Grandbridge Real Estate Capital arranged financing with Stillwater-based Central Bank for the deal including a $250,000 down payment and a new mortgage. Anoka County values the property at $6 million.

Mark Kolsrud, Dave Berglund and Colin Ryan of the Minnetonka office of Colliers International were hired to market the properties by CBRE Investors’ Los Angeles office, which was the asset manager and adviser to CalSTRS.

Purchase price: $6.525 million, with a $250,000 down payment and new mortgage

Price per square foot: $54.38

Property ID: 27-30-24-21-0022

Date of deed: 12-14-16

ECRV released: 02-01-16

4250 Otter Lake Road, White Bear Lake

Description: 72,400-square-foot Class B distribution center, built in 1992, on 5.96 acres

Buyer: Aetna Plywood Inc., Maywood, Illinois

Seller: Fick LP, Backus

Purchase price: $3.1 million cash

Price per square foot: $42.82

The transaction: Five years ago, Maywood Illinois-based Aetna Plywood Inc., acquired the White Bear Lake operations of St. Croix Valley Hardwoods, which retained the company name and its headquarters operations in Luck, Wisconsin. The deal included a lease with an option for Aetna to buy the 72,400-square-foot distribution center at 4250 Otter Lake Road. Aetna has executed that option, paying $3.1 million to Fick LP, an entity related to St. Croix Valley Hardwoods. The sale closed Oct. 29, according to a certificate of real estate value made public Jan. 29.

“We bought a company that was once proud but struggled in the economic downturn,” said Mike Finn, branch manager in White Bear Lake. The company had been hit hard, first by the collapse of the residential real estate market and then by the recession.

“The first couple of years it was about stopping the bleeding and then we focused on growth.”

The company now is in its fourth year of revenue growth, he said.

Aetna is a distributor of wood, laminate, solid surface, quartz, hardware and other residential, office and industrial building products, with locations in White Bear Lake, Maywood and Rockford in Illinois and in Indianapolis. There are 22 employees in White Bear Lake.

Last sale: Ramsey County values the property at $2.856 million for tax purposes

Property ID: 22-30-22-41-0022

Date of deed: 10-29-15

ECRV released: 1-29-16

2166-2178 Silver Lake Road NW, New Brighton

Description: Rice Creek Plaza, a 20,780-square-foot neighborhood retail center, built in 1977

Buyer: Ying Chee Chan & Mary P. Chan LLC, of Plymouth

Seller: Silver Lake Road LLC, an entity of LNR Properties, Wayzata

Purchase price: $1.63 million, with a $1.38 million down payment and a new mortgage, part of a 1031 tax exchange

Price per square foot: $78.44

The transaction: Longtime owner Lowell Zitzloff of LNR Properties in Wayzata has sold a 20,780-square-foot Rice Creek Plaza in New Brighton to a private investor.

Silver Lake Road LLC, an entity related to Zitzloff sold the neighborhood retail center at 2166-2178 Silver Lake Road NW in New Brighton. The property is the northern half of the center, a one-story building housing a salon, China Tiger restaurant and Becker’s Model Railroad Supply.

The buyer was a client who had sold a restaurant and was interested in a new property that would qualify for a 1031 exchange tax deferral investment, said Zitzloff.

“It was just kind of a nice fit for him,” Zitzloff said.

Last sale: N/A; Ramsey County values the property at $952,000 for tax purposes

Property ID: 18-30-23-31-0003

Date of deed: 1-14-16

ECRV released: 1-28-16

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