Biynah buys from CSM, Enrico for $18M

By Matt Johnson - Finance & Commerce

March 11, 2019

A building at 7585 Equitable Drive in Eden Prairie occupied by Johnson Fitness & Wellness is one of four that Minneapolis-based Biynah Industrial Partners purchased in two simultaneous transactions. (Submitted photo: CoStar)

Biynah Industrial Partners took a break last week from a two-year selling spree to buy chunks of Eden Prairie flex industrial space from CSM Corp. and exercise equipment entrepreneur Dick Enrico.

Minneapolis-based Biynah paid a total of $18.08 million for three of CSM’s buildings on Anagram Drive at Edenvale Crossings Executive Park and one Enrico owned up the street on Equitable Drive, according to certificates of real estate value made public on Friday. The Anagram Drive properties sold in a single transaction on March 7. The Equitable Drive building sold in a separate deal that closed the same day.

Biynah, which owns about 2.5 million square feet of industrial space in the Twin Cities, made the purchase after 24 months of near-continuous selling, said Andrew Bennett, one of the company’s managing principals. Partnerships with other investors and a strong industrial market for sellers drove those property sales, but now Biynah is in the market to make some “opportunistic” purchases, Bennett said in a Monday interview.

“We’re being choosy where we’re buying these days,” he said. “I think we’re largely through our season of selling and dispositions.”

The properties Biynah purchased are:

  • A 14,686-square-foot building completed in 1997 at 7595 Anagram Drive.

  • An 84,438-square-foot building completed in 1997 at 7623 Anagram Drive.

  • A 30,001-square-foot building completed in 1997 at 7651 Anagram Drive.

  • A 63,221-square-foot building completed in 1985 at 7585 Equitable Drive.

Biynah paid $13.025 million for 129,125-square-foot CSM portfolio, or about $100.87 per square foot of space. Biynah paid $5.055 million to Wayzata-based Enrico Properties LLC, or about $79.96 per square foot of space. The occupancy rate for the four buildings was about 96 percent at the time of the sale.

Tenants in the former CSM buildings include the Twin Cities design studio for Miami-based homebuilder Lennar and a number of light manufacturing companies. Exercise equipment seller Johnson Fitness & Wellness, which was formerly known as 2nd Wind Exercise Equipment, has offices in the Equitable Drive building, according to CoStar. Taiwan-based Johnson Health Tech acquired 2nd Wind in 2015, which Enrico founded in 1992.

The industrial property vacancy rate for the southwest Twin Cities submarket that includes Eden Prairie is 5.1 percent, according to the Minneapolis office of CBRE.

Hennepin County values the Anagram Drive buildings at $9.6 million for tax purposes. The county values the Equitable Drive building at $3.6 million. That building last sold in 2004 for $3 million.

CSM, which developed the Anagram Drive buildings, was “very pleased with the result” of the sale, said Ryan Bartley, the company’s director of commercial development and investments.

“The property was well-positioned for a sale and the timing was right for us,” he said in an email to Finance & Commerce.

The Twin Cities office of Colliers International started marketing the former CSM buildings at the start of 2018, said Colin Ryan, a Colliers senior vice president. Biynah’s purchase is a good deal because the Twin Cities market that is low on the supply of industrial space, and because new flex space can cost almost $200 per square foot to build.

“Flex isn’t something that’s built every day,” he said in an interview.

Colliers senior vice presidents Mark Kolsrud and David Berglund also represented CSM in the transaction.

Biynah has done some buying in the Twin Cities in the past two years. The company paid nearly $14.43 million in for the 185,750-square-foot St. Paul Business Center in late 2017. Biynah owns properties in seven U.S. states, according to its website.

Minneapolis-based Upland Real Estate Group marketed the 7585 Equitable Drive property.