Inside View: Phil Simonet, principal at Paramount Real Estate Corp.

Principal at Paramount Real Estate Corp.

Phil Simonet, 55, has been specializing in the sale and leasing of industrial and office properties for 25 years — first as a broker at KOLL (formerly the Shelard Group) and today as principal and co-founder of Bloomington-based Paramount Real Estate Corp. He's been involved in a couple of recent deals that indicate that Twin Cities, state-of-the-art industrial space — in strong markets — is back in high demand, both from an investment and leasing standpoint

Minneapolis-based Meritex Enterprises Inc., which acquired an empty, 172,849-square-foot distribution facility in Eagan for $8.85 million this fall, hired Simonet to lease it. The building previously was occupied by Uline, which moved its operations to Hudson, Wis. Simonet said the purchase shows that investors are bullish on modern distribution facilities in markets with little competition — even if the building has no tenants.

"It's interesting to see someone step up and say, 'We're going to buy a big, completely empty building.' It shows that they think the market fundamentals are improving," Simonet said.

Simonet also was the broker representing the St. Paul Port Authority and Wellington Management — owners of River Bend Business Center in St. Paul — in a lease signed earlier this year by Japanese machine tool manufacturer Matsuura Machinery USA. Matsuura leased 38,000 square feet for its new U.S. headquarters in the office/warehouse building.

Q: How's the marketing going for the Eagan property?

A: We've had very good activity with a lot of showings, and some proposals are out. We can either lease it as one entire space or split it down as small as 52,000 square feet. Ideally, we'd like to do a couple of deals.

A: In the southeast/southwest submarkets, 32-foot clear space is unbelievably tight. ... I'm out in the market right now [for a client] looking for 75,000 square feet of high-quality space with 32-foot clear and there's virtually nothing in those submarkets, other than my building.

Q: What else have you done with Meritex?

A: We just finished Lexington Corporate Center in Eagan. We brought them the building and they acquired it essentially empty in 2010, when it was very risky to acquire empty real estate. We filled it up. It has really good credit tenants. It was a fabulous acquisition for Meritex.

Q: How big of a deal was it to land Matsuura at River Bend?

A: It was a big deal. It's a 10-year lease. It's significant for the city to have a quality company like that. It has really well-paying jobs. We're also going to put up a phase four at River Bend.