United Properties has broken ground on five industrial facilities across the Twin Cities that will bring 750,000 square feet of industrial space to the market.
The projects are worth about $75 million combined and include sites in Burnsville, Inver Grove Heights and a Brooklyn Park business park that will gain three new buildings.
Minneapolis-based United Properties, which is owned by the Pohlad Cos., said that half the space being developed has been preleased. The buildings are expected to house a mix of warehouse, office and manufacturing spaces, officials said.
"Despite the uncertainty around the economic impacts of COVID-19, and most recently the rising construction costs and material lead times, we continue to see robust leasing velocity and new tenant requirements across the Twin Cities," said United Properties Senior Vice President and Market Leader Brandon Champeau.
He noted that United Properties is pouncing on the increased demand for industrial buildings with a mix of customized, preleased and speculative offerings. The mix "is evidence of the strength of our site positions in each submarket," he said.
Demand for industrial warehouses, data centers, logistic and distribution centers across Minnesota has flourished in the era of COVID-19.
In contrast, demand for office construction remains slow as business tenants remain uncertain if remote work or work-from-home trends will thwart the need for more office space in the future.
Meanwhile, industrial occupancy rates and new builds have remained strong since industrial businesses were deemed essential and allowed to continue operations onsite.
United Properties' new effort in Brooklyn Park is called 610 Junction and is expected to be ready for occupancy in fourth quarter 2021. The site, near where Hwys. 169 and 610 intersect, will eventually include three industrial buildings ranging from 110,000 to 245,000 square feet.
JunoPacific, a subsidiary of Cretex Cos., preleased the largest of the three buildings. Marmon Holdings leased the smallest. The middle building has yet to find a tenant, officials said.
United Properties' second site is in Burnsville near Oliver Avenue and 126th Street W. Half of that 96,000-square-foot industrial building has been preleased by Poly-Tex.
The developer's fifth project is a 108,000-square-foot speculative building in Inver Grove Heights' InverPoint Business Park.
That project marks the second phase of a much larger development. United Properties has completed a custom building for Simpson Strong-Tie in the InverPoint site in 2020.
Champeau noted that four of the five buildings United Properties announced this week are part of a $165 million joint venture partnership between United Properties and a Los Angeles-based real estate investment and management firm called PCCP.
The joint venture is developing 11 industrial buildings in Denver, Austin, Texas, and the Twin Cities. The Pohlad Cos. is headquartered in Minneapolis, with offices in those cities.
The firm's development arm has been on a tear of late.
United Properties is building the $433 million RBC Gateway tower at the corner of Hennepin and Washington avenues in downtown Minneapolis. It expects the 37-story tower to be finished by February 2022.
The company is also working on, or just completed, senior housing complexes in Minnetonka, Eden Prairie, Apple Valley, Prior Lake, Bloomington and Lake Elmo. The company is not done yet.
"We are gearing up for the next round of development, so we are actively looking for sites across industrial and office and multifamily and senior housing," Champeau said.
