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Real estate: BAE to expand at Fridley site
The defense contractor will add 110,000 square feet; also, developers across the nation are worried about the credit crunch.
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The Twin Cities office of Colliers Turley Martin Tucker recently negotiated a lease expansion for BAE Land & Armament Systems at the River Road Industrial Center in Fridley.
BAE Systems, with U.S. headquarters in Rockville, Md., has about 1,400 employees at the Fridley facilities. BAE owned the property until 2005, when it sold it in a sale-leaseback arrangement with ELT, an affiliate of Commercial Development Co. Inc. in St. Louis.
River Road Industrial Center has more than 2 million square feet and is Minnesota's largest industrial building. It is second only to the Mall of America as a commercial property in the state. The industrial center, built near the end of World War II, originally housed the U.S. Navy and other military contractors.
BAE had occupied about 1.1 million square feet but is adding another 110,000 square feet under the new lease.
Financing uncertainty
After barely registering in recent years, financing has emerged as a growing concern among developers nationwide, according to a recent survey by the National Association of Industrial and Office Properties.
The group's annual "Vital Signs" survey found respondents the most guarded in their outlook in several years, said Doug Herzbrun, managing director of CB Richard Ellis Investors, a CB Richard Ellis subsidiary that compiled the survey results.
From 2002 to 2006, survey respondents overwhelmingly agreed that borrowing money could be done on the same or easier terms than in the previous year. That changed dramatically this year, with almost 75 percent of the survey respondents saying that borrowing has become more difficult.
Only 40 percent of the respondents said this year they believe the national economy is growing, the worst reading since 2003.
More than half said they believe an economic slowdown will affect their ability to increase rents for office and industrial properties in the coming year.
Susan Feyder • 612-673-1723
Susan Feyder • sfeyder@startribune.com
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