Kraus-Anderson Cos. Inc. on Thursday named its first new CEO in nearly 30 years.
Bruce Engelsma, the chief executive of the real estate developer since 1997, is stepping down to make way for Peter Diessner. But the position is still staying in the family for a "third generation of leadership," per Engelsma.
Lloyd Engelsma ― who led the company from 1937 until his death in 1997 ― was Diessner's grandfather while Bruce Engelsma is Diessner's uncle. The line of succession makes sense for the family-owned and privately held company founded in Minneapolis in 1897 as a construction company.
The company built the Goodfellow Dry Goods Co. in downtown Minneapolis in 1902 before it became the iconic Dayton's department store. It has since evolved into a holding company for a collection of related businesses: KA Construction; KA Realty and Development; KA Insurance; and KA Financial Services Group.
"We are in large part primarily a general contractor," said Diessner, who began his career as a real estate attorney in the Twin Cities. "That's our roots. That's who we are."
Diessner initially joined the financial services wing of the family business in May 2018 before becoming president of the realty and development segment in 2019. A year ago, he assumed the role of chief operating officer of the overall company.
Bruce Engelsma will remain as chair of the company's board. Under his leadership, the construction division has accrued annual revenue of $1.4 billion. His tenure also oversaw many firsts, including the construction division's first-ever acquisition — of Phoenix-based Sonoran Crest Construction in February — and the opening of a Fargo office.
Diessner said acquiring Sonoran Crest, which specializes in health care construction, was part of the company's geographic expansion and growth efforts. The North Dakota location was also a "growth opportunity," as Diessner said there was a need for more contractors.
While higher interest rates have slowed the pace of projects in some sectors, Kraus-Anderson continues to find work in the education realm, which Diessner called a "strong sector." In Bloomington, Kraus-Anderson is also redeveloping the Southtown Shopping Center it owns and has already demolished the former Herberger's and Toys "R" Us stores that had been vacant for several years.
Through the past five years, the company's development segment has completed more than 700,000 square feet of development and 1,275 apartment units. Its realty division owns a portfolio of 5.7 million square feet in more than 70 commercial properties in Minnesota and the Upper Midwest, while its insurance outfit is the fifth-largest privately held brokerage in the state.
