Minneapolis - St. Paul Business News

[QuietBlue]

Wow, would have thought it would be a lot closer to US bank, but is close to half the value of UHG! Who da thunk!

It's still pretty high for a retailer. Amazon and Walmart are higher, of course, and I think Costco is too, but I am not sure about any others.

[xandrex]

$46.7b, per the Google.

Wow, would have thought it would be a lot closer to US bank, but is close to half the value of UHG! Who da thunk!

Health insurance and banking are incredibly lucrative sectors. Target doesn't stand a chance compared to those sorts of companies.

[MNdible]

Still, that does seem undervalued. With 1700 stores, you'd think that their real estate alone would be worth almost $46b.

[talindsay]

I think you *drastically* overestimate the value of land: to reach $46bn on 1700 stores you'd have an average real estate value of almost $30m per store. Given that most Target stores aren't in dense areas, the land they sit on is likely worth well less than $1m each; and the buildings themselves traditionally weren't much more than a warehouse, although I'm sure the recent investments have substantially raised the value of the improvements on the land. Still, I'd expect an average store to be worth only a couple or few million. I'd guess the total taxable land + improvement value of most Target locations would be in the $3m range.

To bring some data to this point, the Lake Street Target has land worth $5.6 million, and the building is worth $3.1 million. The building value is probably pretty standard for a Target store, and obviously that land in Minneapolis is worth much, much more than most suburban Target stores. Link to the property record: http://www16.co.hennepin.mn.us/pins/pid ... 84&assmt=1

The Quarry Target has a land value of $5.2m and building value of $6.6m. http://www16.co.hennepin.mn.us/pins/pid ... 2924110033

[MNdible]

I did say almost.

But I don't think the Lake Street Target is a great example.

For one, it's smaller than the newer stores, which means both less land and less building. And I think you may be overestimating the attractiveness of land at Lake and Hiawatha in a poorer neighborhood and an outmoded strip center vs. a newer store location next to a freeway interchange.

Also, assessed values should be taken with a grain of salt, especially for commercial properties.

[MNdible]

So, a bit of research reveals that in 2009, an activist investor said that Target...

...should consider moves to "unlock real-estate" value. He has said Target's real-estate portfolio, mostly land and stores, could be valued at $40 billion...

That was in 2009, in the depths of the recession and a glut of commercial space, and also before they acquired their Canadian real estate and any other subsequent development. Granted, the guy had an axe to grind.

[talindsay]

Fair point, and doing some digging for the suburban locations within Hennepin County you appear to be correct. One additional factor is lot size, as the E Lake Target is on 9.8 acres (which is still actually quite large). The Quarry Target is about the same size, at 10.0 acres.

For comparison the Ridgedale Target has an $8.9m land value and $5.1m building value on 10.2 acres and the Knollwood Target has a $10.8m land and $6.7m building value on 15.5 acres. The Medina Target has a $3.1m land value and $6.4m building value on 10.7 acres.

So it looks like in Hennepin County the new stores have about $6m tied up in the building while the land is quite variable but generally worth more millions than I would have expected. Still, I do expect most of their market has land less expensive than Hennepin County and it seems unlikely that their real estate value could be more than half their value.

[uptown067]

Just for some additional accounting perspective... lets say hypothetically the value of the land is close to $46bln, that doesn't mean the company is worth $46bln. The land is just an asset, so you have to take out their liabilities (which according to their balance sheet is about $30bln). The remainder is their equity which, in theory, could more accurately reflects the value (in this simplified illustrative example).

[Unity77]

Saw something interesting today on MSN home page. They had a page on the 3 largest public companies for each state. I was quit surprised to see the one missing that I sure thought would be in the top 3. I knew Cargill was very big, but they are not public, But I had thought for sure that Target would have been in the top 3, but here are the top 3:

1: 3M with a market capital of 101.7 B
2: United Health Group Incorporated with a market capital of 93.7 B
3: US Bancorp with a market capital of 78.3 B

I'd be curious as to what Target's market capital is? Just a fun fact I thought I'd share.

I have a few friends in Charlotte who work at Wells Fargo. They seem to think US Bancorp will be relocating to Charlotte.

[seanrichardryan]

Well, Richard Davis hasn't put his Lowry Hill house on the market yet.

[twincitizen]

That'd be odd timing when they're about to spend untold millions on naming rights to the People's Stadium...

[Nathan]

That'd be odd timing when they're about to spend untold millions on naming rights to the People's Stadium...

is that for real? Or a rumor?

[lordmoke]

That'd be odd timing when they're about to spend untold millions on naming rights to the People's Stadium...

is that for real? Or a rumor?

Well, Richard Davis was part of the small delegation sent to land the Superbowl, and USBank's name is plastered all over the Vikings' website. But technically I guess it's still a rumor.

[mattaudio]

So, while I was watching the Packer game in a bar last night and a friend said that as part of the Super Bowl package, owners/NFL execs can come to town and play many of our golf courses (or even use bowling alleys and other amenities) for free. Anytime up to and through the event. Is this true?

[Viktor Vaughn]

That was one of the NFL's many requested accomodations on the bid form that was leaked to the press. I don't think it's ever been made public what exactly the host commitee agreed to in order to land the Super Bowl.

[Anondson]

Minneapolis's businesses have a pretty nasty gauntlet of red tape to run still and are complaining about it.

http://www.startribune.com/local/minnea ... 27361.html

It stinks like corruption to have to hire a "consultant" to navigate fine points dropped on you in small bits, only to be told all the expense you were put through didn't apply because of some other fine print.

[MNdible]

It doesn't strike me as being particularly onerous to have to hire design professionals to make sure a public business is compliant with regulations that protect the public health, safety, and welfare.

And if they happen to improve the design of the space, then that's just a bonus.

[FISHMANPET]

Hiring a desinger/engineer/architect is fine, hiring a "consultant" to cut through red tape is not, that doesn't make anyone safer. Getting differing answers on whether you need a designer/engineer/architect, that's certainly not fine.

[MNdible]

Yeah, I wasn't really responding to you as much as I was to some of the kvetching in the article.

I'm all for new small businesses, but some of the complaints sort of sounded like "I don't actually have enough money to start a business."

Obviously there are things the city can do to streamline this, but the reality is that when you open up a new business, you're touching on a lot of different regulatory issues.

[mattaudio]

But doesn't it advantage us all to lower the cost of entry to start a small business? Especially when the barriers produce little to no public benefit? And even if there is a slight public benefit to some of the regulation, sometimes the opportunity cost is high -- a boarded up corner store means a lower density land use, longer trip lengths for employment and shopping, and less public health. Clearly there's a balance to be struck, and I'm glad to see we're moving in the right direction.