Featuring TO: Manufacturing Space Guru

Posted by carlson on October 22, 2015 in Manufacturing

Our very own TO (Tim Olsen) was quoted in an article highlighting the changing landscape of manufacturing space.  Read more below or at http://minnesotabusiness.com/trends-manufacturing-space

Trends in Manufacturing Space

Efficiency, employees and visibility are the catchwords for new manufacturing facilities


That trend is visible in fewer square feet per employee, but increased ceiling heights. Ten years ago, 24-foot clear was the norm. Now, the construction standard is 32-foot clear. “Tenants are trying to improve efficiency by going higher rather than taking up more space,” says Tim Olsen, vice president of Carlson Commercial.

Companies are also building — and buying — their big “boxes,” rather than renovating older properties. “It can be quite expensive to move into a used building and make that your own because it’s so specific to what it was and now it’s got to be specific to what you’re doing with it,” Olsen says. “The cost to buy a building and renovate it can be almost as expensive as to build new.” The number of used industrial properties for sale is scant, as is the demand for such spaces. Prices are also on the rise; Olsen has seen as much as a 25% increase over the past 18 months. “Older buildings typically have more walls in the warehouse, they’re not as clean. There are a lot more nuances to second- and third-generation spaces,” he says.

As for whether to buy or lease, the decision is highly dependent on the individual business. “We’re seeing more companies getting out of ownership and being tenants,” Olsen says. This is because companies make more money in their business rather than in their real estate. Olsen says companies need to analyze whether or not “it’s better to pump your money back into your business rather than in the real estate.”

Employee Magnet

After efficiency, one of the key considerations for companies when considering a building is employees’ current living location. Companies that Olsen works with tend to want the least disruption for employees as possible. Visibility is also a concern; companies may upgrade their image by moving from a Class B building to a Class A building to be more attractive to potential employees.

The west metro, particularly Brooklyn Park, has seen “a rash of speculative construction in the office warehouse bulk product,” Olsen says. “That’s the only area where there’s open land.” Plymouth, Dayton, Rochester and Otsego are also seeing new construction aimed at manufacturers and distributors. “They’re trying to position themselves in the best market, in the best location, where they can find land to build on.”

Inside these buildings, open floor plans are still popular, both for industrial and office space. Companies are looking to show potential hires that the space is “fun, energetic, hip,” says Olsen. “They are trying to keep an open office area, not put everybody into individual boxes. More cubes, not putting privates on the glass. Everyone has the ability to see open, natural light. That gives them the best chance to retain and hire the best talent.”

Parking for new construction varies based on city ordinances. In general, Olsen says, developers plan for 1.5 stalls per 1,000 square feet. While there isn’t a problem of excessive parking space, per se, every parking stall does take away from potential build-out in the future.

Olympian Example

Olympus is one company that built new in Brooklyn Park, both for efficiency and visibility. It consolidated five Maple Grove rental properties into a new 180,000-square-foot facility for its medical device manufacturing. Bringing R&D, marketing, operations, manufacturing and distributing to one location meant higher efficiency for the manufacturing as well as better operational flow.

At the top of Olympus’ design wish list were training spaces for the sales force and physicians to learn about Olympus’ products and an innovation area for R&D. The company worked with RSP Architects and Ryan Construction to create a space where it could be “very visible not only for potential patients, but for physicians as well as employees, a place where we could be very proud of working in and showing people,” says Scott Larson, vice president of Olympus’ Surgical Energy Business Center.

From conception to conclusion, the project, which was completed in 2014, took about two years and cost around $40 million. Mostly one floor, it includes a 24,000-square-foot clean room in the center of the building. The main office, seated at the front of the building, has two levels and houses support functions, customer service, finance and training.

Short cubicle walls and glass office doors lend the space a transparent feeling. “There’s no hiding here,” says Larson. The clean room is all windows; R&D does have shades, but only for confidentiality purposes.

One of the building design features Larson is most pleased with are the “collaboration spaces” which feature tables around a monitor where people can sit in comfortable chairs and work together with laptops. An on-site subsidized kitchen and cafeteria where employees can take breaks have also had unexpected benefits. “Not only does that develop relationships, that’s when the good decisions get made,” Larson says.

Three hundred employees currently occupy the site, and the building was made with 15% growth in mind. The company plans to add 100 new jobs over the next three years and has an additional 110,000 square feet of land on which to expand.
Buying bigger to account for anticipated expansion is not unusual, says Olsen. “If a company has been looking to move, it’s because we’ve already been sitting down with them for a couple of years going over our strategy for three, five, seven, 10 years. When we purchase a building, as a buyer, we’re moving into it because we needed the extra space. We need it today, right now.”

The commercial real estate trends seen in Minnesota’s manufacturing industry are similar throughout the U.S. “There’s been strong demand all over the country for a newer product,” says Olsen.

Blanks USA – 96,000 sf HQ purchase

Posted by carlson on July 15, 2015 in Case Study, Manufacturing, Tenant Rep

Blanks USA

Blanks USA was founded over 30 years ago selling door hangers and raffle tickets. Since its inception, Blanks has evolved into an industry-leading supplier of security paper and die cut paper products. Blanks experienced healthy growth and that growth was projected to continue, which created a real estate issue. Blanks had reached capacity in their single tenant facility.

After meeting with the Blanks USA team and learning more about the company and the owners’ long-term goals, Tim Olsen developed a clear path to accomplish the real estate goals. Blanks USA wanted to leave their facility. Tim was tasked to locate a property that would allow Blanks to expand operations and allow for future growth.

In 2011, Tim found a property located a couple miles from Blanks’ existing location. Using his team’s in-depth knowledge of the local real estate market and property owner, Tim negotiated a closing price $1,000,000 lower than the original asking price. The property had two current tenants and room for Blanks USA to occupy, which accomplished the original objective.

More Space + Less Rent + Awesome Building = #WINNING!!!

Posted by carlson on March 12, 2015 in Case Study, Manufacturing, Tenant Rep

Etech (3)


In 2012, E-Tech engaged Tim Olsen to develop a strategic plan to help with their long-term real estate needs.  An extensive analysis revealed a short-term lease renewal was the optimal solution.

In 2014, 18 months prior to lease expiration, E-Tech hired Carlson Commercial to assist with a potential corporate expansion/relocation in response to significant business growth.  To accomplish E-Tech’s strategic objectives, Carlson engaged in site selection, market analysis, proposal comparisons and lease negotiations.

As a result of the Carlson-led process, E-Tech landed in a space-efficient, high-quality modern facility – all while reducing their lease rate by 18.1% PSF.  To stay within E-Tech’s budget, Tim negotiated a significant moving allowance and free rent to offset relocation costs.

For more detailed information, please visit www.carlson-commercial.com or www.etechsystems.com.



Skyline Displays – North American Real Estate Services

Posted by carlson on February 24, 2015 in Case Study, Manufacturing, Tenant Rep


Founded in 1980, Skyline Displays was created to help companies exhibit easier, better and more efficiently.  With over 80 dealers in North America and over 100 patents on record, Skyline is considered the premier exhibits company.

Headquartered in Eagan, MN, Skyline has worked with Carlson Commercial since 2009.   Our team secured new distribution facilities in Chicago and Las Vegas, renewed distribution centers in Orlando and Toronto, and opened new dealer locations in several locations including Salt Lake City and Phoenix.  In Orlando, we negotiated a 10.47% savings on rent and $217,000 in Landlord funded Tenant Improvements.

Carlson Commercial has a strict policy of hiring local market experts to provide accurate intel on market conditions and Landlord expectations.  These valued experts enable our Carlson team to provide the same expertise we have in the Twin Cities on a North American scale, while we ensure that the corporate real estate strategy is properly executed.  Our familiarity with the client, consistency in analysis’ and data presentations, and trust with decision-makers are critical to successfully implementing our real estate plans.

For more information, please visit www.skyline.com or www.carlson-commercial.com.