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Behind the deal: How Molina’s move Downtown changed ‘in the 10th hour’

Behind the deal: How Molina’s move Downtown changed ‘in the 10th hour’

July 16, 2015
Albuquerque Business First

Molina Healthcare of New Mexico held its grand opening ceremony at its new digs Downtown on Tuesday, inviting the public to view its open floor plan and Civic Plaza views.

Yet few know the story about how Molina got Downtown, or that the entire deal experienced a hiccup that required an out-of-state buyer.

Back in May of last year, Molina Healthcare of New Mexico’s president Patty Kehoe told Albuquerque Business First that the company was on the hunt for a new headquarters that would consolidate its employees. The company had about 400 employees at its headquarters at 8801 Horizon NW and another 200 at another location, and needed about 150,000 square feet of space to grow.

Kehoe said the company looked at the old Presbyterian Healthcare Services campus near the airport, but it was too small. She said the company was considering Downtown’s Plaza Campana, but parking was an issue. Molina eventually settled on Plaza Campana at 400 Tijeras Ave. NW after an agreement provided designated parking spaces for Molina employees in a garage under Civic Plaza. Kehoe said Molina also has three different lots and has leased a private surface parking lot in the Downtown area.

Tom Jenkins, first vice president at CBRE New Mexico, brokered the Molina deal. He helped Molina find its Albuquerque location along with the company’s national brokers. He said Molina also liked Plaza Campana’s systems.
“The guts of the building are solid. It has an incredible heating and cooling system and a powerful fiber network,” Jenkins said.

Yet before Molina could sign the lease, CenturyLink, which owned Plaza Campana, decided it didn’t want to be a landlord and asked Molina if the company wanted to buy the building. Molina, which leases its properties, had to find a buyer for the building “in the 10th hour,” Jenkins said.

“It was a small hiccup since we had settled on the space and knew our timeline,” said Kehoe. “We thought we can work through it so we could find someone who would purchase the building and lease to ourselves and our other tenants.”

It would seem getting an investor to buy a 477,000-square-foot building in downtown Albuquerque would be a hard sell, given the high vacancy rate for office buildings in the area. Yet Jenkins said the process actually went smoothly.

“It would be hard to find an investor for a Downtown building with a high vacancy rate, however with CenturyLink and Molina occupying three-quarters of the building, there was a tremendous amount of interest nationally,” Jenkins said.

Ultimately, Omninet Capital LLC, a real estate investment firm based out of Beverly Hills, Calif.., stepped in and offered to buy the building. It was the investment firm’s first time buying in the New Mexico market, but the company was interested in the building in part because it owns a building in Long Beach leased by Molina Healthcare’s corporate headquarters.
“We are very proud to have Molina Healthcare in another building of ours,” said Michael Daniel, a partner with Omninet Capital.

He said the company also liked the building itself.
“[The building] has large efficient floor plates, which made it an attractive location for Molina and new potential tenants we are currently speaking with,” Daniel said.

Jenkins said Omninet Capital bought Plaza Campana in December. Molina has since moved into its 140,000-square-foot space and Jenkins is working on finding a tenant for the seventh floor.

As for what’s next for Plaza Campana and its new owner, Jenkins said Omninet Capital plans to invest in the buildings and add more restaurant and retail components to the ground floor. Kehoe said Molina will also build a gym for its employees in the building.

Daniel said Omninet Capital is currently working on upgrading the building and rebranding it.
The new name of the building will be ‘Century Plaza,’ Daniel said.