Hempel Cos. has purchased two strip shopping centers and more than a dozen parcels of land throughout the Twin Cities from Ryan Cos. for more than $19.2 million.
Hempel buys Richfield, Maple Grove shopping centers, other parcels from Ryan
$19.2M deal includes 16 land parcels as well as the 2 centers.
The transaction lightens Ryan's portfolio at a time of high development activity while Hempel boosts its holdings with an eye toward adding its own value to the properties.
After seeing Ryan place the two retail centers on the market, Hempel approached with an offer to buy 16 other vacant parcels from Ryan as well.
"We had to be aggressive because a lot of big buyers were looking at it," said Randy McKay, principal at Hempel. "We had the idea of bundling not just the ones for sale but some land that we knew Ryan was maybe looking to get rid of."
The deal includes Cedar Point Commons, anchored by SuperTarget and Home Depot, in Richfield and The Grove in Maple Grove. The company has already received interest from users or developers for all 16 parcels, McKay said, 11 of which are near the two shopping centers; four others are in Savage, Shakopee and Cambridge. Hempel also has another parcel under contract with Ryan in Champlin.
A Ryan executive said the deal, which closed last Wednesday, is a sign of the firm's shift toward new opportunities.
"As the market for new centers has come back, we've found good opportunities to cycle capital from existing projects to new ones," said Mark Schoening, Ryan's senior vice president of national retail development.
Hempel specializes in the purchase and redevelopment of both downtown office buildings and suburban strip retail properties in the Minneapolis-St. Paul area. The company recently sold Canadian Pacific Plaza, in partnership with New York-based Ladder Capital Corp., to Artis REIT of Winnipeg for $68.6 million.
It was Hempel's second time to own and sell the building.
"Our projects are typically value-add in nature," said Josh Krsnak, president of Hempel. He said that over the course of its two ownership rounds between 2011 and 2015, the firm improved common areas and brought in new amenities that raised the occupancy levels from 48 to 81 percent, and then from 89 percent to 99 percent.
Hempel also recently partnered with Interstate Parking Co. to buy a high-profile shopping mall in Milwaukee called The Shops of Grand Avenue for $24.6 million. Each partner owns a 50 percent stake in that project, with Hempel handling all leasing and management. The group hopes to jump-start the vitality of the 1980s-built mall by filling the vacancies with new uses, such as a local brewery or other creative destinations.
In the latest deal, Cedar Point Commons is a 32,000-square-foot shopping complex near the corner of highways 62 and 77 and within sight of the Minneapolis-St. Paul International Airport. In addition to the Target and Home Depot anchors, tenants include Chipotle, Great Clips, Anytime Fitness and Noodles & Company.
The Grove is a 62,000-square-foot property that sits just south of the Highway 610 expansion project near Interstate 94.
Kristen Leigh Painter • 612-673-4767
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