When it comes to retail real estate in Minnesota, Mike Sims and Doug Sailor are hall of famers — literally.
Each is an inductee into the Minnesota Shopping Center Association Hall of Fame, as well as a past president of the MSCA.
Their firm, Mid-America Real Estate Group, has emerged in the postrecession era as the metro area’s top commercial real estate outfit working exclusively in the retail sector.
Eight years after its founding, Mid-America’s St. Louis Park office has expanded to 45 employees and is riding the momentum of a rejuvenated Twin Cities retail scene.
Along the way the young firm attracted some top industry talent into the fold, including fellow principals Stefanie Meyer, Matthew Rieger and Alan Young.
Now, with record-breaking absorption of vacant retail space and Minnesota’s emergence as a hot expansion target for national retailers, the gloom of the not-so-distant past has all but retreated. Thus, it seemed like a good time this week for Sims and Sailor to share some of the lessons they have learned on their firm’s journey with MSCA members.
Mid-America’s story began in 2008 when Sims left United Properties on the cusp of the Great Recession and signed up with the Chicago headquarters of Mid-America Real Estate Group to open a Twin Cities affiliate. Pickings were initially very slim.
“The market now is extremely strong, but I’ll admit that with the way things were then, I would have been the last one to ever guess that,” Sims said.
Meanwhile, Sailor was also struggling with his own firm, Park Midwest Commercial Real Estate, where he had the difficult job of finding tenants for small shopping centers at a time of historically high vacancy rates.
“I had 1.3-million square feet of small shopping center space under management, mainly divided between three owners, each of them were teetering right on the edge, as everybody was in those days,” he said. “At the same time, I noticed I wasn’t seeing Mike around as much as I used to, so I gave him a call to see what he was doing.”
It turned out, of course, that Sims was busy working on getting Mid-America off the ground. After that initial meeting, both realized that a merger of their two firms could be of great use in riding out the recession, and so they tied the corporate knot in 2010.
With Sims’ expertise in representing tenants and Sailor’s in property management, Mid-America was well positioned when the Twin Cities suddenly appeared on the radars of national retailers eager to expand their footprints, a period roughly starting the next year.
The first sign things were picking up, the pair said, was when Mid-America was able to find takers for “junior boxes” — that is, stand-alone, single-user buildings of around 20,000 to 30,000 square feet, left vacant by the bankruptcies of the likes of Circuit City and Linens ‘n Things. Sims’ client list came in very handy, considering it included a host of “nationals” such as Sam’s Club, Lowe’s Home Improvement, Nordstrom Rack, Bed Bath & Beyond, Michael’s and AT&T.
But it was his relationship with Wal-Mart that really proved critical. Mid-America was there for the giant retailer’s push to challenge Target in its home market. That really kicked off when, in 2013, Wal-Mart anchored the redevelopment of the former Brookdale Mall into Shingle Creek Crossing, the first and still-largest new retail project to hit the Twin Cities since the recession.
“If it weren’t for Wal-Mart, I don’t know if I’d be sitting in front you here today,” Sims told the MSCA crowd.
With the future now looking much rosier for Twin Cities retail, Sims and Sailor said one of the key lessons they have learned is that the Internet has probably already done its worst to both brick-and-mortar retailers as well as the commercial real estate industry: The recovery has demonstrated that there are some real-world activities — such as the human interactions between property brokers and clients as well as the unique experiences of in-person shopping — that simply can’t be replicated online.
Don Jacobson is a freelance writer based in St. Paul. He is the former editor of the Minneapolis/St. Paul Real Estate Journal.