St. Cloud industrial sites listed with cash flow potential

Editor’s note: On the Market is a regular feature from Finance & Commerce that highlights interesting commercial real estate that has recently been put up for sale. Let us know about CRE that’s on the market at [email protected].

Another holiday week, another journey up Interstate 94 to Greater St. Cloud. This time, On the Market is checking in on two industrial (ish) properties with attractive cash-flow potential in a product-constrained market.

The first stop is the Sauk Rapids manufacturing facility where Pinnacle Climate Technologies has assembled industrial HVAC equipment for going on 25 years.

Pinnacle has been a St. Cloud-area staple for far longer — since the 1950s — and “is a rock solid company,” said listing broker Cameron Cropsey. The company has about 3½ years left on its triple-net lease, which began in 2019, according to the listing. The listing goes on to describe the property as “a mission critical asset to the company.”

“This is a competitively priced investment sale,” Cropsey said. “We feel we’re fair on cap rates and also feel you could sell it for a similar price to a user if it were vacant.”

The 2001-vintage building has kept up with the times. Most of the roof was replaced in 2020, shortly before the owner added an extensive solar array that provides a significant amount of the building’s electricity. The seller plans to retain ownership of the solar panels via a “roof lease” that would benefit the new owner through recurring lease payments and the tenant via reduced electricity bills, Cropsey said.

The nearly 20-acre site has some room for growth as well. Inventure scoped out the property and found it would be possible to add up to 115,000 square feet, Cropsey said, nearly doubling the roofed-under floor area.

“When they originally did this lease, the tenant wanted to know they had room to expand,” he said.

Address: 1660 13th Ave. NE, Sauk Rapids

Type: Industrial (manufacturing/warehouse)

Square footage: 123,120 square feet

Asking price: $8.9 million

Owner: SRI 13th Ave, LLC (St. Cloud)

Listing broker: Cameron Cropsey & Jacob Cleveland, Inventure Real Estate

Highway 15 retail/warehouse

Just across the Mississippi River on the north side of St. Cloud lies an even larger big-box building that houses showroom and distribution space for Hennen Furniture, the family-owned enterprise that has graced central Minnesota with high-quality home furnishings since the late 1960s.

The steel-framed, block and stucco structure went up in 1995 and saw significant renovations a few years later, according to the listing. The interior is mostly single-level with some mezzanine space, with clear heights of 33 feet in the warehouse portion and about 18 feet in the showroom section.

Like most industrial buildings of this vintage, the showroom has modern forced-air heating and cooling while the warehouse boasts tubular heating units. Three dock-height doors and two drive-in bays with six doors total allow easy loading and unloading at volume.

Located at the southwest corner of the State Highway 15 and County Road 120 interchange, the Hennen property has enviable visibility, two driveways and ample parking. Like the Pinnacle Climate Technologies property, its fringes feature a considerable amount of vacant land, though it’s unclear how much if any additional square footage state and local codes could support.

Address: 1995 State Highway 15 N., St. Cloud

Type: Retail/distribution

Square Footage: 218,554 square feet

Asking Price: $7.5 million

Seller: Triangle Partners, LLC (St. Cloud)

Listing Broker: Steve Feneis & Maria Berdan, SVC GC Real Estate