Stay in the Loop

North Loop’s ‘Hennepin and Lake’

 : Finance & CommerceFebruary 8, 2017
Paster Properties and Urban Anthology paid an undisclosed amount for the warehouse building at 120-126 Third Ave. N. in Minneapolis. They plan to convert it for office and retail use. (Staff photo: Bill Klotz)

Paster Properties and Urban Anthology paid an undisclosed amount for the warehouse building at 120-126 Third Ave. N. in Minneapolis. They plan to convert it for office and retail use. (Staff photo: Bill Klotz)

Does the trendy North Loop neighborhood of Minneapolis have its own version of Uptown’s “Hennepin and Lake” intersection in the works? Jeff Herman thinks so.

The Minneapolis-based retail developer and broker — who has lured several upscale businesses to the high-profile Uptown commercial corridor in recent years — is partnering with Paster Properties to bring that vision closer to fruition at Third Avenue North and Second Street North.

A joint venture between Paster and Herman’s Urban Anthology Commercial Real Estate has purchased the Hillman Building and adjoining Porter Electric Warehouse No. 2 at 120-126 Third Ave. N.

The developers plan to renovate the 24,000-square-foot warehouse complex at the northwest quadrant of Third Avenue and Second Street and lure a mix of retail and office tenants to an intersection that has been revived by new commercial activity in recent years.

“I do consider this sort of the ‘Hennepin and Lake’ of North Loop,” Herman told Finance & Commerce on Wednesday. “It’s established itself as a main commercial intersection for the neighborhood, both from a pedestrian experience and destination perspective.”

The deal closed Feb. 1, Paster Properties said in a prepared statement Tuesday. The buyers declined to disclose a purchase price. A certificate of real estate value was not available Wednesday. Hennepin County values the properties at $820,000.

Both buildings were constructed in the late 1800s. The seller is Hillman Mechanical Equipment Co., which has operated its business there since the 1950s. Representatives for the company weren’t immediately available for comment Wednesday.

“We will use our development expertise combined with Urban Anthology’s knowledge of local urban retail to provide the fastest-growing neighborhood in Minneapolis with retailers that will add value to the community,” Howard Paster, president for Paster Properties, said in a prepared statement Tuesday.

The developers haven’t yet inked any deals for tenants, said Jessica Peterson, spokeswoman for Paster. They have received a historic tax credit for the project and hope to begin renovations at the complex this spring, she added. A late-2017 completion date is targeted.

The warehouse complex sits across Second Street from the five-story Colonial Warehouse, which offers 203,000 square feet of retail and office space and is 87 percent occupied, according to CoStar. The Excelsior Group paid $29.5 million for the renovated mixed-use building in April 2016.

The intersection of Third Avenue and Second Street is also one block south of Spoon and Stable and The Bachelor Farmer, two popular restaurants that helped boost the North Loop’s profile as a nightlife and dining destination in recent years.

Herman is well-known for his work as a broker luring upscale businesses to the Hennepin and Lake corridor in Uptown, including Apple Store, Dogwood Coffee, Roam and Paper Source. He has also helped broker deals to secure high-profile clothing retailers along Grand Avenue in St. Paul and at 50th & France in Edina. But Herman is no stranger to the North Loop, or the intersection of North Third and Second, for that matter.

Both Grethen House and D.Nolo, two high-end clothing retailers that opened at Colonial Warehouse and the 219 Building in recent years, hired Herman to represent them in securing their store spaces.

“I think it’s clear Jeff has done a great job in recruiting retailers to the Uptown area,” said Fritz Kroll, a Realtor and board member for the North Loop Neighborhood Association. “And if he’s involved in investing in this project in the North Loop that tells me he feels this is a retail node that is very viable.”

Lead Photo: Paster Properties and Urban Anthology hope to start work on their renovation of the 24,000-square-foot warehouse at 120-126 Third Ave. N. this spring. The complex is across the street from Colonial Warehouse. (Submitted rendering: Paster Properties)