MNCAR Profile: Opus’ Design-Build Model: Brokers and Their Clients Can Rely on Certainty of Outcome in Their Build Out


​Whether it's TriZetto Corp.'s new worldwide headquarters in Denver -- which was completed in just 12 months -- the $47.3 million Iowa State University's Geoffroy Residence Hall that came in more than $1 million under ISU's target budget, or the award-winning Xcel Energy Inc.'s new build-to-suit headquarters expansion in downtown Minneapolis, Minnetonka-based The Opus Group's unique design-build approach is making headlines.

Opus was a pioneer of the design-build method, which takes a vertically integrated approach to commercial real estate by offering development, construction and design. The model is unique because it's created by one integrated team of experts, allowing Opus to utilize all of its resources during all stages of the development process.

"What the integrated model really allows for is the certainty of outcome," says Matt Rauenhorst, vice president of real estate development for Opus Development Company, L.L.C. "The certainty of outcome comes from having the influences and processes of design, construction and the ownership via the development group at Opus. Some of the specifics that come out of that are locking in pricing earlier and better understanding of all of the risk factors surrounding a development, such as entitlements, environmental, infrastructure and scheduling." 

Opus promises to deliver a high-quality building that meets the scope, Rauenhorst says. The building is finished as intended – on time and on budget. In addition to build-to-suits, the design-build model also applies to leasing and tenant improvement work on Opus' speculative industrial projects.

Unique Method Offers Assurance to Brokers

This design-build approach allows for a certainty in the deal for the broker in that a build-to-suit is what their client wants and/or needs, and the entire process will run as smoothly as possible, Rauenhorst says.

In essence, a broker is putting his or her client's relationship in the hands of the developer.

"The broker makes a recommendation to work with a developer, and that broker's image or reputation and ability to do repeat business is really going to be tied to the success of the overall project," Rauenhorst says. 

A Broker's Firsthand Experience

Russ Nelson, president and principal at NTH Inc., a Minneapolis-based commercial real estate brokerage, has worked with Opus on many major transactions, including the U.S. Bank West Side Flats Operations Center in St. Paul, and most recently, Xcel Energy Inc.'s new corporate office. The new nine-story building is located across the street from Xcel's headquarters. The two towers now create a two-building campus downtown and are connected by skyway over Nicollet Mall. 

NTH represented Xcel Energy in lease negotiations for their new space. 

The new 212,000-sf Xcel Energy facility, at 401 Nicollet Mall, opened in July 2016. It was built on the site of an old parking garage and the entire project was completed in less than 24 months.  

"Why does it work for me and my firm with Opus?" Nelson asks. "First, trust. We trust them. We don't get led astray. We don't get played. It's straight up on what they can do, how they approach something, what they'd like to do. And if they can't do something, they step out saying it's really not our cup of tea. But if they can do it, they roll up their sleeves and work hard at it."

Second, Nelson points to Opus' experience and expertise.

"They have long-term build-to-suit experience and they have the expertise in that they've fine-tuned the connectivity between their design within Opus and the construction and the development to make it all work for the client," Nelson says.

In the case of Xcel's new facility, he says it's an attractive and highly functional building. "They listened to the client and what the client needed so the space works extremely well for Xcel Energy," Nelson says.

And of course, value proposition is crucial.

"They're not spending money they don't need to spend…" Nelson says. "They're value-oriented. They build the quality that the client wants for their budget."

The Xcel Energy project was delivered under budget and ahead of schedule, allowing employees to move in early and save on operating costs. (The building recently won a regional design-build award).

Opus Offers Broker Challenge Incentive

The broker-developer relationship is key. "Opus likes to have a little bit of fun in partnering with their brokers," Rauenhorst says. "One example is the ability to celebrate the successes for completed transactions with a broker trip."

Every year Opus offers a Broker Challenge. If a broker completes a deal with Opus in one of several categories, they will join Opus on an all-expense paid ski or golf trip to Vail, Colo., or Phoenix, Ariz.

Here's a link to some opportunities where brokers can complete transactions to qualify for the trip.  

This article originally ran in MNCAR's e-newsletter.