Company News

The Lakeville Specialty Center development showcases strategic foresight and adaptability in real estate, delivering essential healthcare services to an underserved and rapidly growing suburban area. Acquired on a speculative basis, the site was tailored to accommodate the specific requirements of MNGI Digestive Health and Allina Health. Despite significant design and approval challenges, the development successfully met the evolving needs of these key clients.

The Lakeville Specialty Center is a testament to the power of strategic foresight, patience, and adaptability in real estate. In July 2021, Davis acquired the Lakeville site on a speculative basis, recognizing its potential in a market underserved by specialty care providers. Despite its strong demographics, considerable size, and prime location along Highway 35, Lakeville lacked sufficient medical services, forcing residents to travel to Burnsville, Edina, or Minneapolis/St. Paul for specialty care. The site at 185th Street was strategically chosen for its proximity to Highway 35, providing excellent visibility and accessibility for future patients and providers a like.

At the time of purchase, Davis anticipated that the market and site would eventually align with the needs of one of its clients. This prediction proved accurate when MNGI Digestive Health expressed interest in the location. Acting as a strategic real estate partner, Davis collaborated with MNGI to develop a comprehensive market coverage plan. This included opening a new site in Maple Grove, closing a St. Paul surgery center, and expanding into Lakeville.

To meet MNGI’s needs, a 50,000-square-foot medical office building was designed, although MNGI initially required only 22,000 square feet. The decision to oversize the building was made to provide MNGI with a better cost structure and create additional space for complementary medical services. Before the design was finalized, Allina requested an additional 75,000 square feet within the complex for additional services to be offered by MNGI. Consequently, the building’s size was increased to 100,000 square feet while adhering to the original timeline set by MNGI. This expansion required Davis to work diligently with their design partner, Synergy Architecture Studio, to swiftly redesign the building, secure Allina’s approval, negotiate a lease, and obtain city approvals.

To accommodate the increased building size, Davis needed a creative solution for the required parking. They considered both a parking ramp and underground parking. Despite the latter being significantly more expensive (around $6 million), Davis opted for underground parking to preserve the building’s aesthetics, without altering the deal structure with MNGI.

The Lakeville Specialty Center opened on December 15th 2023 right on schedule as planned with MNGI. For MNGI and Allina, it stands as the crown jewel among their clinics. For Davis, the Lakeville Specialty Center is a showcase of our ability to exceed customer expectations while navigating numerous development challenges. These included holding land, redesigning the building from 50,000 to 100,000 square feet, securing neighborhood and city approvals on a tight timeline, designing and constructing an underground parking garage, and maintaining lease rate commitments despite rising interest rates and construction costs.