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MN Snapshot: Retailers targeting smaller markets in state

45 Broadway Ave. N., Cokato
1400 First Ave. E., Cambridge

The strength of the economy can be seen in new retail construction throughout the Twin Cities, but retailers also are turning attention to smaller markets.

For example, Excelsior-based Oppidan is working with Green Bay, Wisconsin-based Shopko to bring the retailer’s new, smaller format Shopko Hometown stores to communities in Minnesota, Iowa and South Dakota.

Oppidan recently completed a 26,169-square-foot store in Cokato, selling it to an Arizona-based private real estate investment trust for $4.04 million in cash. The sale includes a long-term lease to Shopko.

KTJ 241 LLC, an entity related to Oppidan, closed Dec. 23 on the sale of the store at 145 Broadway Ave. N. in Cokato to VEREIT SH Cokato MN LLC in Phoenix, according to a certificate of real estate value. The purchase price works out to $154.38 per square foot.

Shopko is far smaller than retail rivals Target and Wal-Mart, with $3 billion in revenue and 330 stores in 21 states throughout the Midwest, Pacific Northwest, mountain and north central regions, according to company information. The company has 32 traditional and small-format locations in Minnesota, all outside the Twin Cities. A traditional store is part of the North Branch Marketplace in North Branch, which sold Dec. 20 for $20.9 million.

Shopko introduced the Hometown format in new stores in 2010 and in 2012 expanded its reach by merging with Omaha, Nebraska-based Pamida and converting 170 Pamida stores, mostly in small markets. Oppidan has been focused on building new stores, said Paul Tucci, vice president of development for Oppidan.

“We’ve finished seven to date, we have four more under construction and we’re working on multiple additional locations,” Tucci said. The four under construction include two stores in South Dakota, one in Iowa and one in Nebraska.

How did Oppidan get the company’s attention?

“We kept calling on them,” Tucci said, adding that good old-fashioned persistence paid off.

Oppidan also is scouting new development opportunities to help other national tenants move into small markets, he said.

The company closed Dec. 30 on a $926,000 deal for land for what it expects will be a $5.5 million multi-tenant project at the site of Greenberg Motors in Cambridge. The deal works out to $235,623 per acre.

“It was actively listed,” Tucci said. “He was looking to retire. They were hoping to sell.”

Oppidan bought the property from Leonard, Joyce and Ruby Greenberg, in a deal that lets the owners lease for three months while they wind down the business.

The 3.93-acre site lies just north of Highway 95 and west of McKinley Street. Oppidan plans to remove the current building and create two retail buildings, one with 26,500 square feet and the other with 6,000 square feet. The new space is about 70 percent leased, but tenants aren’t ready to announce the agreements, Tucci said.


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