Dolan Media Newswires
Minneapolis — The two giants of Twin Cities-area commercial real estate — Minnetonka-based Opus Corp. and Bloomington-based NorthMarq — have announced a deal in which NorthMarq will acquire Opus’ property-management business.
Opus chose NorthMarq from among eight companies it had approached about buying the Opus Property Services LLC division. The companies want to close the deal by the end of August.
The pending deal will add a national portfolio of 30 million square feet to NorthMarq’s property-management business, immediately doubling its size to 60 million square feet.
NorthMarq will add 140 employees from Opus as part of the deal.
“Markets like this create opportunities in all kinds of areas,” said Jeff Eaton, president of NorthMarq Real Estate Services, which handles brokerage and property management.
Eaton said the portfolio includes about 170 properties in 20 U.S. markets. The portfolio is heavily weighted toward office and industrial properties, but also includes some retail. Roughly two-thirds of the properties are owned by Opus funds.
About 4 million square feet of the Opus portfolio is in the Twin Cities.
“This is right in our wheelhouse,” Eaton said of the Opus portfolio.
A key part of the deal is that it brings NorthMarq’s property-management platform to many new cities.
“That’s really the strategic fit that’s so important to us,” Eaton said. “We want to play on the national field and work with national players and national investors.”
After the deal is complete, NorthMarq will have 1,000 employees at 35 locations.
NorthMarq completed a reorganization in May 2008 with the goal of expanding its national reach. The company’s four business lines are NorthMarq Capital, NorthMarq Real Estate Services, NorthMarq Investment Services and NorthMarq Corporate Solutions.
NorthMarq’s parent company, Bloomington-based Marquette Real Estate Group, also owns United Properties and RJM Construction. Marquette Real Estate Group is privately owned by the Pohlad family. RJM Construction has 125 employees; United Properties has 51 employees.
Opus is going through a tough year. Three of the company’s five regional operating divisions have filed for bankruptcy protection. The company is shopping its recently completed 148,000-square-foot headquarters expansion in Minnetonka for sublease. Meanwhile, U.S. Bank sued Opus in federal court in July over a loan default.
In late July, Opus said it would restructure around its core business lines of development and construction.
This week, a statement attributed to Mike Dwyer, executive vice president of Opus Property Services, touted the “cultural fit” between the two companies.
NorthMarq is scouting other potential deals as part of its growth plans.
A statement attributed to Eaton said, “We’re able to do this now for a variety of reasons. It supports a growth strategy that we set in motion over a year ago. It’s one of the advantages of being a private company and a well-capitalized company. While the real estate investment arena continues to be very difficult, we’re not buying real estate here: we’re expanding our service business. If you can take a long view, you can seize opportunities that are out there today.”