GE Real Estate provided a $33.2 million, fixed-rate loan to the Dougherty for the purchase. The three-year loan has two one-year extensions. The venture is investing about $11 million of equity in the transaction, which was brokered by Grandbridge Real Estate. Chris Perry and Matt Halberg represented Grandbridge.
Sources say the properties include City West Financial Center at 6500 City West Parkway in Hopkinds, 55 West Financial Center at 10405 Sixth Ave. N. in Minneapolis, Eden Woods Business Center at 10300 Valley View Rd. in Hopkins, Cedar Business Center at 1701 American Blvd. E. in Minneapolis and Olympia Business Center at 1325 American Blvd. E., Minneapolis.
The properties are about 88% occupied, with small-to-medium-sized tenants, says Marty Heilmann, a director with GE. "We liked this deal for three reasons: Dougherty is very experienced, it's in their home territory so they'll manage them very carefully; we like the market, and the properties have high-quality tenants with good lease deals. The local market is strong, due to a very educated population, and vacancies are reasonably low and expected to stay that way," he tells GlobeSt.com.
Dougherty plans to spend about $4 million to make improvements, lease up all the assets to market levels, manage the tenant rollover and increasing rolling rents to market, Heilmann says. The property fits into Dougherty's strategy of focusing on core, small cap properties that generate stable cash flows and offer opportunities for value creation over three to seven years, he says.
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