Hennepin County shopping vacant office building - Finance ...

Posted: 4:25 pm Tue, September 6, 2011
By Burl?Gilyard
Tags: Denny Walsh, FTK Properties, Hennepin County, J. Michael Noonan, NorthMarq, Scott Pollock, William E. McGee Building

Hennepin County has owned the eight-story William E. McGee Building in downtown Minneapolis since 1995. The building has been vacant since 2009. (Staff photo: Bill Klotz)

Hennepin County is looking to shed a vacant office building it owns in downtown Minneapolis. The William E. McGee Building at 317 Second Ave. S. has been sitting vacant since 2009. But the county is now testing the market in response to inquiries about the building.

?We weren?t really rushing to take it to the market, but we?ve had some inquiries,? said J. Michael Noonan, senior administrative manager with the county?s real estate division. ?If there are some good proposals, I think it?s in the county?s best interests to consider those.?

The Hennepin County Board declared the building surplus property in the fall of 2010. The county announced issuing a request for proposals (RFP) on Aug. 31. The county is hosting a pre-proposal meeting and tour of the building on Sept. 19, and proposals are due by Sept. 30.

But at this point, the county has no listed price for the building and is not asking for bids.

?We?re asking for expressions of interest,? Noonan said. ?It?s a process that?s really there to test the market and see what the market?s interest is.? According to the RFP, a proposal ?constitutes a suggestion to negotiate.?

The building was built in 1904, with the seventh and eighth floors added in 1909. It offers 71,582 rentable square feet.

What?s unknown at this point is who might emerge to potentially buy or occupy the building.

Even amid signs of gradual improvement in the local office market, vacancy remains high. At the end of the second quarter, Bloomington-based NorthMarq reported a vacancy rate of 18.9 percent in downtown Minneapolis. Counting available sublease space, the vacancy rate in downtown Minneapolis climbs to 22 percent.

According to NorthMarq?s numbers, more than 5 million vacant square feet of office space is available in downtown Minneapolis.

Scott Pollock, senior vice president with NorthMarq, acknowledged that he is not very familiar with the county-owned office building. But he noted that the building is close to transit connections along Marquette Avenue and the light rail transit line in downtown Minneapolis.

?It?s either going to be a user that can use a smaller floor plate, or it?s an investor who really sees a market for small to medium-sized firms in that location,? said Pollock, a veteran investment sales broker. ?The challenge will be that it?s kind of away from the core along Nicollet [Avenue].?

Hennepin County paid $4.4 million for the property in June 1995. The building has not been on the radar of commercial real estate brokers because it has been government owned for the last 16 years. The city of Minneapolis owns about three-quarters of the property on the block, which is near City Hall.

The building was named for William E. McGee, who was Hennepin County?s chief public defender when he died of cancer at age 47 in 2000.

The county has also been a buyer of downtown real estate. Hennepin County paid $23 million in June for the 701 Building at 701 Fourth Ave. S. The 280,000-square-foot tower had most recently been owned by a commercial real estate investment group in Dallas.

The Hennepin County Public Defender?s Office in the fall of 2008 moved from the McGee Building to the 701 Building, which is kitty-corner from the Hennepin County Government Center.

The McGee building has some environmental issues, including lead-based paint and asbestos. Some employee concerns were part of the reason that Hennepin County moved out of the building. The RFP states: ?the samples from former employee work areas were well within acceptable standards for lead-based paint exposure.?

Noonan said the building is sturdy and fundamentally in good shape.

The owner of another downtown building that?s about the same size as the McGee Building said it has been tough to find buyers.

The 900 Building at 900 Third St. N. in Minneapolis is largely vacant and for sale. The 60,000-square-foot building is listed for $2.85 million. The building in the North Loop area dates to 1919. Redevelopment plans stalled when the economy hit the skids, said Denny Walsh of Crystal-based FTK Properties.

?It?s been a slow market,? Walsh said.

This entry was posted on Tuesday, September 6th, 2011 at 4:25 pm and is filed under Real Estate, Top Story. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Source: http://finance-commerce.com/2011/09/hennepin-county-shopping-vacant-office-building/

cavalier king charles spaniel cavalier king charles spaniel parker parker tony parker als e!