We’re excited to announce that our most recent acquisition, BLVD Banning Row, officially closed last week. BLVD Banning Row is a 20,000 sq. ft retail and office building in Downtown White Bear Lake, MN. We’d like to extend our gratitude to our investment partners for their continued trust. While the BLVD team has extensive experience with retail and office tenants, this marks our first time owning a property of this kind.

How We Found It

Dan has a personal connection with the previous owner of BLVD Banning Row, which played a key role in securing the deal. A few years ago, Dan rented office space in the building and developed a relationship with the owner. When he found out it was for sale, he acted quickly and reached out immediately. After touring the property, we were able to get it under contract quickly. Our local presence and familiarity with the area gave us an advantage in winning this deal.

What We Like About It

Location

The location of this asset is truly unmatched. Situated in downtown White Bear Lake, an affluent Twin Cities suburb, it offers excellent walkability, providing a strong advantage for the ground-floor retail tenants. Additionally, the retail spaces serve as a convenient amenity for the businesses occupying the second-floor office space. Just steps from White Bear Lake, the property also offers access to a scenic walking and biking trail, further enhancing its appeal to both tenants and visitors.

NNN Lease

While we primarily focus on multifamily investments due to their stability, one advantage of the retail/office sector is the ability to pass operating expenses on to the tenants. This includes costs like insurance and taxes, which can increase significantly year over year. With a triple net (NNN) lease, these expenses are absorbed by the tenants as they occur, per the terms of their lease agreements.

Our Business Plan

One of the main tenants in this building has just one year remaining on their lease. Since that tenant also owned the building, they had been paying below-market rent for the space. We plan to secure a new tenant and adjust the rent to market rates. Additionally, we are converting a portion of the upstairs offices into executive suites, which are in high demand in this submarket. These suites offer individual offices ranging from 120 to 150 square feet, along with shared amenities like a conference room and kitchen. This approach allows us to achieve a significantly higher rent per square foot.

The Capital Stack

We partnered with a local credit union to secure debt for this project. We also had the seller carry a portion of the note on a 5 year term that is interest only. Additionally, we raised $1.35 million from our investors, and the offering filled quickly, requiring only six investors in addition to our GP co-invest.

How It’s going

We have our architect working on process of converting the upstairs office space into executive suites. This transformation aims to enhance the property’s appeal and attract new tenants seeking high-quality office environments. Additionally, we’ve enlisted the services of a broker to help lease the ground-level retail space. Their expertise will assist us in finding the right tenant who aligns with our vision for the property and can maximize its potential in the local market.

Thank you for reading and your interest in BLVD Ventures. We look forward to having you follow along. Feel free to reach out anytime with questions and connect with us further using the button below.