Eden Prairie City Council meets City Center broker
The Eden Prairie-based worldwide logistics company C.H. Robinson Worldwide is vacating the Eden Prairie City Center building in March 2014, and to prepare the city has hired a real estate broker to help find a new tenant for the 65,000-square-foot space, located at 8080 Mitchell Road.
The Eden Prairie City Council’s first meeting with John McCarthy and Larissa Champeau of Cushman and Wakefield was Dec. 4. Some other buildings it has helped broker have included ADC Telecommunications, another C.H. Robinson location, Alliant Techsystems, Windsor Plaza and the River Knoll Office Building.
At the meeting, the city council and McCarthy discussed the strengths and weaknesses of the space, reviewed competing vacant buildings in the area, shared possible lease prices and listed marketing strategies.
“We can see a scenario where this could be a corporate headquarters for somebody,” McCarthy said.
There are several vacant buildings in Eden Prairie and the surrounding area, and the five to six year pattern of increasing vacancies has improved, he said.
“The fact that there’s no new construction, it’s kind of creating a healthier market,” McCarthy told the city council.
City Center highlights, according to McCarthy:
• Tremendous location
• Excellent value proposition
• Strong local ownership
• Regional accessibility
• Abundant area amenities
• Well maintained property
• Fiber optic connectivity
• Above-average parking
City center’s proximity to local and regional highways and access to the planned light rail commuter train are high selling points, McCarthy said.
Building amenities such as the Garden Room, restaurant, workout facilities and other conveniences could accommodate several tenants’ interests, and are things they could leverage when marketing the building, McCarthy said. C.H. Robinson’s fiber-optic network that will remain in the space after the company vacates is also a strong attribute, he said.
The landlord – the city – occupying the same building as the available space can show a potential client that the space will be well maintained.
“When the owner is in the building that speaks volumes,” McCarthy said.
It helps when the tenant is reputable and has strong credit and overall standing, as the city does, McCarthy said, given a market shifted toward buyers who are interested in knowing how stable a potential landlord’s credit is before venturing into a long-term agreement.
With parking availability that’s better than average, “that puts you up at the top as far as the competition,” McCarthy told the city council.
The space’s challenges include 20-year-old interior finishes, a nonrectangular floor plan and finding a tenant that could occupy the entire vacant space.
With all things considered, McCarthy said the initial recommendation is to lease the space for about $21 per square foot.
Since it was an initial meeting and shortly before a regularly scheduled city council meeting, council members did not ask many questions, but they did briefly discuss whether they would put the option of selling the entire building on the table.
Council members Ron Case and Brad Aho said the goal and marketing should be about leasing the space, but it’s worth keeping their options open.
Aho said it would be worth analyzing what a sale price might be and considering costs for different scenarios – such as moving city hall or building a new city hall should the city center be purchased instead of leased.
The city council will also consider setting aside space for a business incubator, where people starting a new business could have a space to work from at little or no cost.