Located just ½ block off Nicollet Mall the Lakewood Building is in a high profile location, but because it is not in a highly visible location, tucked behind more predominant mid and high-rise buildings, it is often overlooked. The current owner purchased the building in 2002 when the building was 80% occupied. Occupancy consisted of various small tenants on 1st and 2nd floor, and one major tenant on the top three floors. In 2007, that major tenant vacated the building. The subsequent economic downturn affected the building owner’s ability to release the property, resulting in the building’s occupancy dropping to 20% where it lingered throughout the recession.
• 51,850 square feet, five stories high
• Built in 1928, renovations in 1958, 1974 & 1988
• Skyway connected
• Average gross rent: $22 psf
• On-site building maintenance & security
Recognizing that the Lakewood Building’s location made it a highly desirable asset, the building owner set out to attract key Target Corporation vendors and other tenants that desire a Class A location, but not Class A rents. To assist them in this endeavor, they turned to Mike Wendorf and Principle Real Estate Advisors.
Often, the strategy of a landlord is to put lots of money into build-ing upgrades and renovations and increase rents and then market the building. Because the Lakewood Building is a low-rise building with very limited net rentable area, the strategy needed to be different. Principle Real Estate Advisors began marketing the building, and continue to market the building, as is. The asset is an affordable option in the heart of downtown’s central business district.
It is not a glamorous high-rise with state-of-the-art amenities. What it is; is skyway connected to two Fortune 50 companies and mere steps from all the premier CBD office towers and amenities. As new tenants have been attracted to the property’s key location and affordable rent fees, the landlord in turn has been able to upgrade the building interiors, such as carpet and lighting. Restrooms have all been remodeled and building HVAC systems have been upgraded. Tenants spaces are built out under the management of Principle Real Estate Advisors and all cleaning and maintenance is on-site.
Principle Real Estate Advisors manages the day-to-day operations of the building, in addition to the leasing. Strategic on-site management cuts costs and increases revenues while maintaining strong relation-ships with the existing building tenants.
For us – the location is great. The Lakewood Building provides accessibility to shopping, restaurants and most importantly our customers. The skyway access is most helpful. Parking is easily obtained in nearby lots and frequently there is on street parking available. Building management is very responsive. We have no complaints.
-Gary Stone, Nathan Weiner and Associates
Principle Real Estate Advisors looks for solutions. Whether sign-ing a new tenant, managing the building or responding to a tenant request, PRA gets it done.
-Bob Fine, Commercial Property Owner & Developer
Principle Real Estate Advisors currently manages and oversees the leasing for the Lakewood Building, which at this time is 80% leased, boasting an internal rate increase of more than three times return. Under Wendorf ’s management all building systems have been re-evaluated and operating expenses have been held at a consistent number making the Lakewood Building not only a profitable investment for the building owner, but a high-quality, affordable option in the downtown core.
• Current average NER: $13 PSF
• Approximate added value: 2.3 million
• A comprehensive redesign and update of Nicollet Mall is scheduled to commence in the Spring of 2015 with completion estimated for 2016. This public /private partnership will modernize and revitalize downtown’s primary gathering place.
• A new bar and restaurant, Asian fusion Ling & Louie’s is scheduled to open in late 2014, joining the numerous dining establishments that currently line the Nicollet Mall.
• Plans are underway and progressing to continue activating the Cultural Corridor – a stretch of downtown that starts at the Nicollet Mall and continues west to First Avenue and runs from the Walker Art Center to the Mississippi River. Activations include pop-ups galleries, green spaces and live performances.
• On the north end of Nicollet Mall, new office towers and residences are in the works. Opus is scheduled to begin work on Xcel Energy’s nine-story second office tower with completion scheduled for 2016. Additionally, another Opus project – The Nic on 5th, a 253-unit luxury apartment building will be completed in August of 2014. Opus is exploring developing the 300 block of Nicollet Mall with a mixed-use, office and residential tower.