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Prolific Pharmacy Developer Buys Key Corner in Plymouth

Complex Deal Unfolded Over Four Transactions
February 5, 2018
In a multi-part deal, Howard Bergerud and his development partners have acquired a 1.5-acre site on the southeast corner of County Road 6 and 101 in Plymouth, MN from David Johnson, whose family had owned the property for more than 80 years.

Bergerud and Huntsville, AL-based Five Star Development of Alabama Inc. are planning to build a CVS pharmacy on the property, which is currently occupied by a gas station and a small retail center built in the late 1980s. Bergerud also purchased, and then immediately sold, a 91,238-square-foot retail center called Oakwood Square, which is immediately to the south of the future CVS.

The buyer of Oakwood Square is Scott Weber, who owns a number of multifamily properties around the Twin Cities and several retail centers as well. Oakwood Square, his newest acquisition, was built in 1987 and is tenanted by Subway, Caribou Coffee and others.

"It was a very complicated transaction," said Jeff Budish, Bergerud’s broker and vice president with the Minnetonka office of Toronto-based Colliers.

The transactions unfolded like this:

On Jan. 29, Johnson sold all four parcels to an entity called Oakwood 1400 LLC, a Minneapolis-based company controlled by Bergerud, Budish said.

The northern portion, which consists of 17435 - 17405 County Road 6, sold for $3.9 million. The southern half, 17415 CR 6 and 1400 CR 101, sold for just over $4 million.

The first round of transactions totaled about $7.9 million in all.

In turn, Bergerud sold the north half of the site to a Huntsville, AL-based It’s Cold MN LLC for $4.45 million in a transaction that closed on Jan. 30. It’s Cold is tied to Five Star Development. The purchase price works out to about $2.93 million per acre. The two parcels had a collective value of about $1.85 million for taxes payable in 2018, according to Hennepin County records.

Weber paid Bergerud $4.65 million for the strip mall to the south, which sits on 2.09 acres. That deal closed on Jan. 29 and works out to $2.22 million per acre, or about $51 per square foot. The two parcels included in the deal had a collective value of about $2.73 million for taxes payable in 2018, according to Hennepin County.

The second round of sales totaled $9.1 million.

Weber said he bought the retail spot as an investment, and plans to operate it as-is.

"Retail like that doesn’t come along very often. It’s in a great location," Weber said on Thursday. "And it has 13 small spaces with some national tenants, so if we lose a couple it won’t be a big deal."

Bergerud could not be reached for comment, but plans submitted to the city of Plymouth call for a 9,600-square-foot CVS store and pharmacy, which would be about 3,000 square feet smaller than a typical location.

The Plymouth City Council approved plans for the new store on Jan. 9. Budish said Five Star plans to begin work on the new CVS store in spring.

Bergerud is the president of Minneapolis-based Semper Development, which has built hundreds of Walgreens stores across the country.

Clare Kennedy, Minneapolis / St. Paul Market Reporter  CoStar Group   
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