Development Efforts Convert Vacant Land
into $4 Million per Year Asset
 TIAA-CREF is a national financial services group of companies and the leading provider of retirement security in the academic, research, medical and cultural fields. |
Challenge
TIAA-CREF owned a vacant 4.1-acre site within Normandale Lake Office Park. The vacant land was located among three other office buildings that were fully occupied, and the park needed to expand to accommodate the growth of existing tenants or risk losing those tenants to newer properties under construction. Real estate development is outside TIAA-CREF’s core business focus, and the company was reluctant to commence a speculative office development. United Properties’ reputation as a developer along with its existing property management and leasing relationship with TIAA-CREF gave TIAA-CREF confidence that United Properties could successfully develop the property.
Strategy
United Properties persuaded anchor tenants in the existing buildings to expand into the proposed new building instead of moving to a new location. Once 40 percent of the new building was pre-leased, TIAA-CREF allowed construction to begin. In the late 1990s, when the building was being designed, the look of office buildings was moving away from reflective blue glass to more pre-cast structures. The three existing buildings in Normandale Lake Office Park were constructed with blue glass. To meet new design standards but also blend with the existing structures, the new building – the 8000 Tower – was given a blue glass exterior, instead of a pre-cast façade, and the interior was designed to be more contemporary.
Results
As a result of United Properties’ efforts, the 8000 Tower was 90% pre-leased by the time the building opened in 2001. The new building provided a long-term home for key tenants by providing room for those tenants to expand without leaving Normandale Lake Office Park. TIAA-CREF increased its cash flow from the property by turning a non-performing asset into a revenue generating property. Net operating income now exceeds $4 million per year on what was a vacant parcel of land. In addition, the 8000 Tower was recognized by the commercial real estate industry as an outstanding office property in 2001 when it received the Award of Excellence from the National Association of Industrial and Office Properties (NAIOP).
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