Executive director of brokerage services at Cushman & Wakefield/NorthMarq
In what could likely be the Twin Cities' largest real estate transaction in 2012, a joint venture led by Chicago billionaire Sam Zell of Equity Group Investments in August acquired the 1.7 million-square-foot Normandale Lake Office Park in Bloomington for a reported $268 million.
Tom Tracy, veteran office broker at Bloomington-based Cushman & Wakefield/NorthMarq, knows the five-tower complex inside and out, having leased it for former owner Teachers Insurance and Annuity Association-College Retirement Equities Fund since 1997. The new owners retained Cushman & Wakefield/NorthMarq to lease and manage the complex, currently 84 percent leased. Tracy says he has another 50,000 square feet of potential leases that could close by year-end.
In the past five years, Tracy has been involved in 160 transactions at the park totaling 1.5 million square feet in new leases, expansions and renewals. Tracy has consistently been one of his firm's top performers and is president of the Minnesota Commercial Association of Real Estate.
QWhat's behind the park's success?
AThe last three years have been a little tougher with the economy, but when you have a premium asset and a really good value proposition like we do -- where we have amenities, services and quality that's really unrivaled -- you're going to outperform.
QHow's it different from other office complexes?
AIt's the biggest Class A office complex in this market. There are about 5,000 people who come to work here every day and about 90 different companies in a range of industries. Many national and international companies' headquarters are here. ... Amenities include Caribou, D'Amico, New Horizon, two fitness centers and three delis. It's pretty unique.
QWhy do tenants choose this space?
AWhat it ultimately comes down to is, do people believe they can have a more successful business because of this location? ... If people believe because of this location they're going to attract and retain the best employees, then they'll make this choice. That and image. They get that there's an image associated with the park. People know there are companies who've been here for 25 years. Tenants include Morgan Stanley, Merrill Lynch, Towers Watson and Prime Therapeutics.
QWhat does it say about the property to have an investor like Zell acquire it?
AIt's not just commodity real estate. When you're a big investor like a Sam Zell, there are not many assets like this anywhere in the country. Our capital markets team was hired by Teachers to sell the asset. We had investors really from all over the world look at this real estate.