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MINNESOTA'S LARGEST LEASE? One of Minnesota's most significant, and largest real estate transactions of 2001-2002 involved the relocation of law firm Fredrikson & Byron. After a challenging series of events involving edge of their seat deadlines and breakthroughs, Fredrikson & Byron agreed to sublease 148,000 square feet of space from General Mills, Inc. The gross rental value of the transaction is $67 million. Minneapolis based Keewaydin Real Estate Advisors negotiated the lease, contingent on the merger between General Mills and Pillsbury. As part of the merger of General Mills and Pillsbury, Pillsbury employees were moved from Pillsbury Center in downtown Minneapolis to General Mills' headquarters. Peter Kitchak, president of Keewaydin, is known for his insight and creativity with regards to the complex real estate needs of large companies. Kitchak is credited with being the first to realize the Pillsbury Center space would be available and working strategically to meet the challenges brought on as a result of negotiating during a merger. The deal also includes important expansion options. In addition to benefiting Fredrickson & Byron, Kitchak's sublease idea was appealing to General Mills who would have had to write off the cost of their 14 year lease as a loss. Fredrikson & Byron faced a tight real estate market, at that time, and had 400 employees to house. Other challenges for Keewaydin included getting through Federal Trade Commission delays while antitrust issues regarding the General Mills/Pillsbury merger were resolved. The outcome was that Fredrikson & Byron ended up with the downtown location they wanted, inside the Pillsbury Center, six floors higher than had originally been available. General Mills, represented by law firm Faegre & Benson, benefited by being able to avoid significant liability during the merger. The build-out was recently completed and the firm has just moved into their new headquarters. Article taken from facilitycity.com, November 2002 |