Hot property: 13600 County Road 62

Where: Minnetonka Type: Office-warehouse

Size: 72,000 square feet

Buyer: Investors Real Estate Trust

Price: $4 million

Details: A growing North Dakota-based commercial real estate investment firm has expanded its presence in the Twin Cities' west-suburban market by buying 72,000 square feet of Minnetonka office-warehouse space.

Investors Real Estate Trust, or IRET, Minot, N.D., paid $4 million for the 13-year-old property, according to Hennepin County records. IRET Senior Vice President Charles Greenberg said the facility was purchased from retail interiors builder Environments Inc., and then leased back to the company in a so-called sale-leaseback transaction.

"This acquisition fit well in our basic investment strategy of acquiring high-quality properties which provide long-term, stable income for our investors," Greenberg said. "In addition to being a good investment for IRET, the sale-leaseback of the property to the former owner had the effect of unlocking significant capital for them, which they can now use for other business purposes. It was a true win-win for both parties."

In a typical sale-leaseback transaction, a company sells its building to an investment group, taps a significant amount of capital for itself, then signs a long-term lease with the new owner. Usually, such leases are in the 10- to 15-year range, giving the investors a much-needed assurance in today's markets that the building will have a stable renter for a long time, industry experts say.

But the recession has put the brakes on sale-leaseback deals as well. Research by New York-based Real Capital Analytics indicated that U.S. sale-leaseback transactions plunged 86 percent in the fourth quarter of 2008 when compared with the year-earlier period.

DON JACOBSON