Terrace Group builds portfolio with $10M purchase of Metro 94 Business Center

The Terrace Group, a local real estate investment firm, has added the Metro 94 Business Center in St. Paul to its growing portfolio.

Terrace paid $10.5 million for the four-building property in a deal that closed in early November but was announced Wednesday. The property was previously owned by Metro 94 Business Center LLC, a local partnership.

The property, which totals 105,000 square feet, is just east of downtown St. Paul in the Interstate 94 corridor.

"We like that location a lot. It's got a pretty diverse tenant mix," said Todd Geller, a partner with the St. Paul-based Terrace Group.

Tenants include medical, grocery, banking and child care businesses. There are also manufacturing and warehouse tenants. And the Metropolitan Council leases a building for its Industrial Waste and Pollution Prevention division and some operations for the Gold Line bus rapid transit project.

The property ends the year with 24 tenants leasing 98% of the space.

Metro 94 Business Center, considered an office warehouse property, offers a mix of flexible space. Geller said that the property includes approximately 75% of finished office and showroom space and about 25% industrial space.

The property has smaller bays and lower ceiling heights than large warehouse industrial buildings. That's in line with many of the other properties that Terrace Group has acquired since the company started in 2015.

"It was a good fit within our portfolio," Geller said.

One appeal of this niche of properties, said Geller, is that the buildings tend to have lots of tenants. It can be counted on for stable income because the departure of a single tenant does not typically mean large vacancies.

"They tend to operate kind of like apartment buildings," he said.

The deal expands Terrace's portfolio in Minnesota and Wisconsin to 24 properties with 1.3 million square feet of space.