Broker expands strategy for vacant State Farm propertyA brokerage firm is trying to be creative as it markets the long-vacant State Farm Insurance building in Woodbury amid a dour commercial real estate market.
By: Scott Wente, Woodbury Bulletin
A brokerage firm is trying to be creative as it markets the long-vacant State Farm Insurance building in Woodbury amid a dour commercial real estate market.
Its previous sale efforts unsuccessful, State Farm turned to NorthMarq Real Estate Services earlier this fall to find a new owner for the 473,000-square-foot building at Radio Drive and I-94 that has sat vacant for several years.
NorthMarq is trying to sell the property to a company, or perhaps even a college or university, that would use the entire facility, but also is exploring ways to lease it to one or more tenants, said Tom Stella, NorthMarq senior vice president.
“It’s no secret that it’s a softer office market,” Stella said. “You’ve really got to get creative.”
NorthMarq also is working with an architect to identify ways to divide the building to serve multiple tenants.
“We’re looking at everything right now,” Stella said. “We’ve had some interest, (but) nothing is done.”
State Farm built the complex in 1996 and was once the city’s largest employer. But by 2003 it began relocating divisions at the Woodbury headquarters to other offices, and eventually ended local operations.
The building has sat vacant for several years, but it retains a high rating in a measure of an office space’s quality, taking into account a building’s age and infrastructure, Stella said.
And the location, near a major interstate and in a growing suburb, is a plus.
“Woodbury has all the major amenities that employees want to attract and retain employees,” he said.
The biggest challenge, he acknowledged, to finding a buyer is that it is too large for many companies. Another factor working against State Farm is that the western Twin Cities area has been more attractive to large companies than has the east metro.
City officials say they sometimes receive calls from companies interested in Woodbury commercial properties, but there have been no inquiries about the State Farm site.
“We’ve not had any interest in the building from (potential) users,” said Janelle Schmitz, Woodbury planning and economic development manager.
When there was greater demand for retail space a few years ago, the city was approached by companies wondering whether the State Farm site could be used for retail, Schmitz said.
The property has a “places to work” designation in the city’s comprehensive plan.
State Farm actually owns two parcels along I-94: the building site along Radio Drive and an adjacent undeveloped lot to the east.
Stella declined to cite the property’s asking price.
A Washington County property estimate put the building site’s value at $34.9 million, the undeveloped lot at $4.9 million. Property taxes and an assessment on the two parcels totaled $1.27 million this year. State Farm is current on its property tax payments, according to Washington County property records.
State Farm has taken good care of the site.
“From a city perspective, we’re really happy to see that,” Schmitz said. “They’re maintaining the property. They’re paying the taxes. Most people drive by it and wouldn’t necessarily know it’s an empty building.”
Schmitz added: “Obviously we would love to see it filled with a nice number of jobs, but we’re kind of at the mercy of the market in that regard.”
What would you like to see become of the vacant State Farm building along I-94 and Radio Drive? Let us know. Leave comments here or send letters to the editor at firstname.lastname@example.org