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Masthead & Welcome Fall


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Volume 1, Issue 3


C O M M E R C I A L R E A L E S TAT E PUBLISHER Castle Rock Media Group, LLC Associate Publisher Marie Suchy, Director of Business Development Asher Silber, Director of Communications Connie Mermelstein EDITORIAL Editor-in-Chief Kristi Oman, Editor Elin Michel-Midelfort, Editorial Board Helen Brooks, Jeff Herman, James Lockhart, Jim MacKinnon, Patrick Smith


Contributing Writers Mike Mosedale, Dan Emerson, Jane Caffrey, Kathryn Nelson, Liz Wolf ART & PRODUCTION Art Director & Production Manager Corey Gasman,

Letter from the Editor

Photography Jesse Ascher, Matthew Seefeldt

Let’s get back to the days when you could call your banker about a great property you just drove by and he’d approve the deal over the phone. Within a week of Northmarq listing your building, you’d have three buyers fighting over it. Potential tenants would be walking through your door every day to rent space. Is this “normal” ever going to be normal again? Have faith. Brighter days are ahead again. Check out the article, Opening the Vault on page 26, where we interview Joseph Witt and Marshall McKay, two of Minnesota’s leading authorities on Banking. We also talk about the millions of dollars Black Rock Development is dumping into Calhoun Square on page 38. Black Rock Development didn’t become the world’s largest commercial property owner by making stupid business decisions. Don’t miss the cover story about Kelly Doran on page 20. Talk about taking matters into your own hands! As always, your feedback will be the success of this magazine. So keep it coming!

Kristi Oman Editor-in-Chief Winter 2009

SALES & MARKETING Sales Director Asher Silber, ADVERTISING ACCOUNT EXECUTIVES Dana Avery Katherine Hendrickson A D M I N I S T R AT I V E General Counsel Patrick Smith CREDIT MANAGER Cheryl Seidenkranz

CRE Magazine, including its owners, management, employees, suppliers and otherwise involved parties does not guarantee any of the services and any information provided in the magazine to be correct. CRE Magazine shall not be responsible for the accuracy, legality, dependability or validity of any content provided by any third party to CRE Magazine. Certain content of the CRE Magazine, such as text, graphics, images and other material (“Content”), are protected by copyright under both United States and foreign laws, and title to the Content shall not pass to you. Unauthorized use of the Content may violate copyright, trademark, and other laws. None of the Content may be reproduced, transcribed, stored in a retrieval system, translated into any language or computer language, retransmitted in any form or by any means (electronic, mechanical, photo reproduction, recordation or otherwise), resold or redistributed without the prior written consent of CRE Magazine or the appropriate owner of the material. For information obtained from CRE Magazine’s licensers, partners or other third parties, you are solely responsible for compliance with any copyright, trademark and other proprietary rights and restrictions and are referred to the publication data appearing in any bibliographic citations (if any), as well as to any copyright notices appearing in the original publications or otherwise. You may not sell or modify the Content or reproduce, display, publicly perform, distribute, or otherwise use the Content in any way for any public or commercial purpose. The use of the Content on any other website or in a networked computer environment for any purpose is prohibited. CRE Magazine reserves the right to amend this disclaimer at any time. As you are subject to these terms and conditions, you should review them from time to time. © MN CRE Magazine 2009

CRE Magazine


Table of Contents Fall 09


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Volume 1, Issue 3






WINTER 2 0 0 9





TC Multifamily

Lynn Carlson Schell, a woman in a man’s world

Where the grass is a little greener. By Mike Mosedale

Bold moves pay off for developer. By Liz Wolf



LEED-EBOM: adding value in a down market

Banker, can you spare a dime? What’s Greg Miller’s next move after being rejected by 22 banks? By Dan Emerson

How to get your building certified. By Tod Elkins

20 Kelly Doran takes matters into his own hands He shells out 10.8 million of his own cash in Dinkytown project. By Dan Emerson

38 Can the Square be ‘hip’ once again? BlackRock banks on a Calhoun Square rebirth. By Dan Emerson

44 Uptown Bar is slated for demolition and redevelopment By Liz Wolf

26 Opening the Vault? Coming out of the meltdown, what’s ahead for commercial bank lenders in Minnesota? By Dan Emerson



Twin Cities Market Watch – a look at news and notes in commercial real estate


Broker Q&A – featuring Tayna Bell of Wellington, and Sonja Breyfogle, V.P. of NorthMarq

10 Law Talk – with Patrick Smith

Online: News, events and a chance for you to sound off on what is happening in Minnesota Commercial Real Estate at 2

CRE Magazine

48 Before & After – story and pictorials of local renovations 50 Commentary – selecting a general contractor 56 A Look Back – at the Young-Quinlan Building Winter 2009

Kelly Doran Sydney Hall


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Kelly Doran Sydney Hall


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Developer Kelly Doran builds on a persistent approach at his new Dinkydome project By Dan Emerson ou could say Kelly Doran is a doit-yourself kind of guy. To obtain financing for his $36 million renovation of the Minnesota Dinkydome near the University of Minnesota campus, Doran put up nearly one-third of the money himself: $10.8 million, to supplement a $21 million loan from the PrivateBank of Chicago. After months of delays, work began in August on the project, which includes the adjacent, 125-apartment Sydney Hall (named for his youngest child). Doran 51, spent three years acquiring the Dinkydome property, wading through the bureaucratic municipal and neighborhood process to obtain more than a dozen permits and licenses. Along the way, he scaled-down the project, to satisfy neighboring property-owners and the city planning commission. Doran’s project hit a snag in July 2008, when the city Planning Commission denied rezoning and variance requests, finding the 13-story project was too tall for the location. A few weeks later, the city council granted Doran’s revised plan for a 12-story tower, which included conditions such as pushing back build-


Kelly Doran invests $10.8 million of his own cash in his new project Sydney Hall.

Photos By Matt Seefeldt

Winter 2009

ing elements from the property line. Doran’s persistence, and eventual success, in pushing through the Sydney Hall project is an example of the approach that has made him wellrespected in the industry, according to his real estate colleagues. Doran, grew up in South Minneapolis as a self-described “latchkey kid,” whose parents divorced when he was 4. Attending Southwest High School, he was a starting center on a city-champion football team, where he may have developed some of the tenaciousness that would serve him well as a real estate developer. “I wasn’t a great player by any means. But, like any kid at that age, I enjoyed the team concept, being part of a group.” Doran must have developed his work ethic early. He got his first job in ninth grade, washing dishes at a Chinese restaurant. He worked his way through the University of Minnesota selling landscaping, shoveling snow and delivering liquor, among other jobs. He earned an MBA from the Carlson School of Management in 1982. After working as a commercial banker for several years, a headhunter recruited CRE Magazine


Lynn Schell Feature


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Bold moves pay off for developer Portrait photos by Matt Seefeldt

By Liz Wolf


ynn Carlson Schell launched Minnetonka-based Shelter Corp. in the early 1990s in the midst of a commercial real estate downturn. Her company acquires, designs, builds, manages and finances multifamily and senior-housing projects. As a new owner in a tumultuous environment, she says she “learned by the seat of her pants,” and with a lot of sweat equity, her company flourished. Today, Carlson Schell—who has worked hard to succeed in the traditionally male world of commercial real estate development—has a portfolio of 8,000 units, boasts revenues of $131.6 million and employs 1,285. Despite another frail commercial real estate market, Carlson Schell says her company is poised for growth, particularly in the burgeoning senior-housing market. As a young developer in the 1980s, Lynn Carlson Schell never had a burning desire to run her own company. In fact, she was very content with her role as a deal-maker. “I love the deal. That’s where I get my butterflies,” says the now 49-year-old. “I cut my teeth on transactions and paid no attention on how the office was managed, and I honestly didn’t care. I loved closings. I loved doing business. I loved my relationships with third-party professionals, investment bankers and lawyers. Life was good.” She spent nine years with Can-American Realty Corp., a company her father, Gary Carlson, and his business partners Caption? founded. She did residential, condominium and apartment development in the Midwest and Florida. Then in 1991-92, the commercial real estate market tanked. Can-American’s principals began moving on to other endeavors and extracted the wealth from the company. “As the real estate environment got more and more diffi-

cult, the people who had employed me became more remote, and I had gone from being an employee to running the office almost overnight,” she says. “The real value was in the small ongoing property management and the deals under development in a very tough environment, and those were all mine.” She recognized an opportunity, offered a buyout, took her deals and incorporated Shelter Corp. in January 1993. She had contracts for 2,000 housing units. Carlson Schell never let being a female in the male-dominated commercial real estate business deter her. “It was sort of an opportunity that was thrust upon me,” she says, “but getting a kernel of a business pulled together that I could grow and control became very attractive.” Carlson Schell says she would later realize that running her own company allowed her not only financial independence, but also flexibility for the all-important work/life balance. She has three children. She learned early on that as a woman professional, “you can’t have it all,” and “it’s all about make choices.” She is teaching that philosophy to her two young daughters. Understanding that life is a marathon and not a sprint, she says, helps making those choices easier. Going out on her own in a depressed market was risky, but Carlson Schell was confident. “I consistently describe myself as a non-risk-taker in a business that really attracts people who flourish and are really strong at taking risks,” she says. “I believe in our credentials, skills and competency, so that allows me to take calculated risks. But I’ve never been to Vegas in my life, and I don’t like stress.” Despite her aversion to stress, Carlson Schell took on extensive personal liabilities. She bought her developments back

Since forming Shelter Corp., Carlson Schell has personally generated more than $749 million in developments and acquisitions.


CRE Magazine

Winter 2009

Lynn Schell Feature

Fall 2009


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