MINNEAPOLIS—The Twin Cities have rapidly developed into one of the nation's healthiest real estate markets. The most recent version of the Urban Land Institute's publication Emerging Trends in Real Estate ranked the region 9th among 50 US metro areas in terms of development prospects. And Minneapolis-based Hyde Development recently did its part to maintain that reputation by launching a huge infill project at Northern Stacks, a historic industrial site a few miles from Minneapolis' downtown, that will transform an underutilized 122 acres into a modern business park.
“The supply is extremely tight right now and companies that are expanding don't have a lot of opportunities,” says Jason Simek, a senior associate with Colliers International | Industrial Brokerage, who helped represent Hyde in its $13.5 million purchase of the property at 4800 E. River Rd. in suburban Fridley from St. Louis-based Environmental Liability Transfer Inc. But Hyde and Colliers have higher aspirations for Northern Stacks than simply developing a standard park to satisfy that demand.
“We thought that this was a great piece of history we wanted to preserve,” Simek adds. The site once served as a World War II-era manufacturing facility, run by 7,000 employees who made battleship gun turrets and other key components. The Navy awarded the facility the Battle E Award for energy and efficiency six times, a rare feat. With the award, an “E” was placed on the site's smoke stack, followed by a star for each additional award, and Hyde plans to preserve this bit of the past to honor the role played by the Twin Cities in the war.
According to Simek, “the long-term goal is to redevelop it piece-by piece.” Hyde specializes in redeveloping infill sites that may have environmental issues into state-of-the-art industrial property, and in Phase 1, the firm will construct, on a speculative basis, a 213,000-square-foot bulk warehouse on the property's southern end. The building will feature a 32' clear height, 50' x 50' column spacing, and include ample docks and drive-ins. Hyde plans to have it ready by the third quarter of next year. In addition, the firm plans to put up an adjacent 135,000-square-foot office/warehouse building with a 24' clear height.
“From the southern end you can see the skyline of downtown Minneapolis clear as day,” Simek says. The two new buildings will hug both the Riverfront Regional Park and the Mississippi River on the west side, with I-694 just to the north, rail access to the east and the relatively affluent neighborhood of Northeast Minneapolis, and all the amenities it provides, just to the south.
The heart of Northern Stacks, however, remains the roughly 1,000,000-square-foot industrial building that sits at the center of the site. But the building is underutilzed, as BAE Systems, which has a short-term lease, uses less than half the space to manufacture weapons for the US military. The building is somewhat obsolete, due to a shortage of docks and other factors, Simek says, and Hyde may start taking down parts of it while “accommodating [BAE's] long-term real estate needs.”
In the long term, he adds, Hyde can build about 1,600,000-square-feet at Northern Stacks. “This project is a lot of fun,” because with all of the open land, much of it “is a blank canvas. We can really fit any type of business or use at this site.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
