UnitedHealth Group Inc. is looking to buy the former headquarters of ADC Telecommunications Inc. in Eden Prairie, sources say.
The sprawling three-building complex sits on nearly 90 acres of land at 13625 Technology Drive, south of Hwy. 212. It has an estimated market value of $44 million, according to Hennepin County property tax records, but likely is worth significantly more. With 450,000 square feet of office space, it could cost $112 million to $135 million to rebuild in today's market, commercial real estate brokers estimate.
A deal on the property would be one of the area's biggest commercial real estate sales since the recession began, and the third-largest in the past 12 months, according to LoopNet. The two largest, 50 South Sixth Street and the TCF Tower in downtown Minneapolis, were both investment-driven transactions.
UnitedHealth spokesman Don Nathan declined to speak specifically about the Minnetonka-based health company's interest in the ADC building. In a statement, he said: "As UnitedHealth Group continues to grow and serve all aspects of health care, we are assessing various options for supporting our operations and our expanding workforce in the Twin Cities area."
Dan Gleason, a broker with NorthMarq, the Bloomington commercial real estate company that is marketing the ADC building, declined to comment.
UnitedHealth is the nation's largest managed care company by revenue and one of the Twin Cities' largest employers. It has about 11,000 workers spread across 13 locations in the Twin Cities.
Although it leases most of its commercial space, the company also bought land off of Shady Oak Road in Eden Prairie in 2000, Nathan said.
The company's health information services business, Ingenix, also is based in Eden Prairie, at leased space at 12125 Technology Drive. The 1,000 employees work out of several locations, including one on Valley View Road.
UnitedHealth expanded to a second building on its corporate campus in 2009, and construction is underway on a third building that is expected to open in the third quarter of 2012.
ADC Telecommunications sold itself to Swiss-based Tyco Electronics last year for $1.25 billion. Tyco said in February that it planned to sell the underused headquarters building by fall.
Mike Ratcliff a U.S. spokesman for the Tyco Electronics, declined to comment on current negotiations.
About 200 office workers at the Eden Prairie headquarters are expected to move out to the plant in Shakopee.
Wells Fargo currently leases space in one of the buildings, accounting for about a quarter of the existing space.
The complex was built in 1999, when ADC, a telecommunications equipment manufacturer, was rapidly expanding with the high-tech boom. The company started in a Minneapolis basement in 1935 and grew to 22,400 employees worldwide. The company never regained its previous size after the dot-com bubble burst. When Tyco bought it, the company had about 9,500 workers.