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Falcon Real Estate Sells Single-Tenant Building for $30.1 Million

Falcon Real Estate has sold a Class A office building fully occupied by Cargill, Inc. in Minnetonka, Minnesota. The 152,220-square-foot building was sold by Falcon for $30,085,000 on behalf of its client, an overseas institutional investor. This pricing equates to a capitalization rate of 7.65%. Cargill is an international provider of food, agricultural and risk management products and services and consists of approximately 160,000 employees in 67 countries.

“Because we are in a challenging real estate market, now more than ever investors are seeking stabilized properties like this one,” said Larry Welsh, Vice President of Falcon Real Estate. “Our strategy was to secure a five-year lease renewal with the building’s strong credit tenant prior to the sale in order to provide a more stabilized investment opportunity. We successfully secured the lease renewal in 2007 with the new term starting this November. Additionally, we exceeded the anticipated pro-forma return providing added value to our client.”

Located at 12700 Whitewater Dr., the six-story property is situated on 6.2 acres of land and is within Minnetonka Corporate Center Business Park, a suburban campus environment. The asset was built in 1998 and includes a parking garage and 4,000 square feet of storage space.

Falcon purchased the property five years ago on behalf of its client who was attracted to the NNN lease with Cargill and the stable local market, which continues to remain strong today. This sale is indicative of Falcon’s overall corporate strategy for its clients.

“Falcon invests using solid real estate fundamentals” said Scott Sweeney, Executive Vice President with Falcon Real Estate. “We seek out assets in prime locations, built to the highest quality standards with solid credit-worthy tenants. Core assets with these attributes perform better than other property types over the long-term.”


September 2008