The seller was Frauenshuh Cos., the city's largest developer of commercial office properties. Frauenshuh constructed the building for publicly traded Lawson Software in 2000 on behalf of the City of Saint Paul. Shortly after it was completed, the St. Paul Housing and Redevelopment Authority agreed to sell the 13-story office building and the retail space along St. Peter Street to Frauenshuh for about $53.5 million. The deal did not include the parking ramp.
Lawson occupies nine of the building's 13 floors under a long-term lease. Other tenants in the building include St. Paul F&M Insurance, Bremer Bank, Kincaid's Fish, Chop & Steakhouse and several retail service providers. The building's overall vacancy was not immediately available.
According to SEC documents, $4.5 million of Behringer Harvard's purchase price is being held back in lieu of a master lease agreement between Behringer Harvard and Frauenshuh. A source at Behringer Harvard could not be reached Monday for further explanation.
Frauenshuh SVP Gary Lindstrom says the sale will result in its financial obligation to the City being repaid early. In addition, Frauenshuh retains the management and leasing contract for the building, he says.
Lawson Commons is the 11th property in the Behringer Harvard REIT I Inc. portfolio. The REIT now owns commercial office buildings in Washington, DC; Baltimore; Houston; Atlanta; St. Louis; Los Angeles; and Denver. Behringer Harvard funds own two other Minnesota properties. They are Minnesota Center, located in Bloomington and an office building in nearby Hopkins that houses Sungard's local corporate headquarters.
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