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Arsenault’s Real Capital Solutions scoops up new Medtronic campus for $188M

LAFAYETTE — In one of Boulder County’s richest commercial real estate deals of 2023, Real Capital Solutions, a real estate portfolio company run by local investment guru Marcel Arsenault, recently purchased the newly completed two-building Medtronic Inc. corporate campus in Lafayette. 

Louisville-based RCS paid $188 million for the two, five-story buildings at 404,159 square feet located at 200 and 250 Medtronic Drive on a 42-acre tract just south of the Intermountain Health Good Samaritan Medical Center. Arsenault confirmed the purchase to BizWest Friday morning. The seller was Minnesota-based Ryan Cos. US Inc., which built the campus. 

Ryan, through holding company Ryan Lafayette LLC, bought the Medtronic site in 2021 for $8.5 million. Ryan representatives declined to comment on the RCS deal. 

“For a couple of years, we’ve been tracking the deal. We know the developer quite well,” having purchased a handful of prior developments from Ryan, Arsenault told BizWest. The Medtronic deal in Lafayette was the largest deal RCS, which has about $2 billion in assets under its management, has completed with Ryan. 

The medical-device maker had the Lafayette facilities built in order to consolidate nearby operations in Boulder and Louisville. The campus is expected to eventually house about 1,000 workers from business divisions including surgical innovations, patient monitoring, respiratory intervention, gastrointestinal and cranial and spine technologies.

“There’s a reason why we chose this place. We’re one flight away from anywhere in the United States from this particular location,” Medtronic executive vice president Brett Wall said when the project broke ground in 2021. “… When you talk about Colorado, everybody wants to come here.”

The Medtronic campus was initially planned to be part of the Redtail Ridge development at the long-vacant Phillips 66 (NYSE: PSX) property adjacent to U.S. Highway 36, but the company backed out of the development as local residents and city leaders balked at the scope of the ambitious proposal. Several iterations of Red Tail Ridge have been kicked around since, but none have been approved. 

In Lafayette, Medtronic, the sole tenant of the campus, is locked into a 20-year, triple-net lease at the property now owned by Real Capital Solutions. 

“Highly reliable” rental income that increases each year of the lease is part of what made the deal attractive, Arsenault said. 

“That’s part of our safe investment strategy,” he said. “… It’s kind of like buying a bond — very, very safe. We know over the next 20 years to the penny what their rent will be.”

Nine-figure deals have been few and far between of late as interest rates have skyrocketed and investors have tightened their belts in the face of macroeconomic headwinds.

“It’s hard getting financing for any commercial real estate,” Arsenault said. “But, frankly, we’ve been doing this for almost 40 years, we work with 30 of the largest banks in the country and we have an extraordinary reputation. We’re able to get a loan on any deal we want under very favorable terms.”

The credit strength of Medtronic also helped with financing term favorability, he added. “We got precisely what we asked for from the lender.”

Source: BizWest