Lunnen Real Estate – Father Son Real Estate Duo
When Tom Lunnen first came to Williston three years ago his experience was not, by most standards, ideal. His hotel room was overpriced, he could not get a table at Applebee’s, to get to Wal-Mart he had to park a block away from it, and once inside it took him nearly an hour to buy allergy medicine. Moreover there were “trucks going in every direction” and countless construction sites.
Clearly it had the makings of the average traveler’s nightmare, yet Lunnen was no traveler and Williston was hardly an eyesore before greater, greener pastures. “We stayed about a week,” Lunnen says, “and came back in two weeks and started buying land.”
Tom Lunnen is a seasoned veteran of the development and real estate world. For nearly four decades, he has been able to construct over 2 million square feet of residential, retail and industrial building space and has developed over 13,000 acres of land across Colorado, Utah and California, where he is based. Yet Lunnen seemed altogether taken aback by the activity and opportunity he saw when he came to the Bakken region in 2011.
“I saw Williston and Williams County as the brightest spot in the US,” he says. “I saw that as the story of the century.” Indeed, as North Dakota assumed its place as the country’s second-largest producer of oil, the frenzy to lay some claim in the Bakken region has only intensified, and it is frenzy for which Lunnen, along with his son and managing Principal Jeff Lunnen, is well suited to make sense of and profit from. “We have long history of success in the real estate business, we can do almost anything an industrial user wants done in Williams County and Williston.”
Jeff describes Lunnen Real Estate Services as “a full-service company,” providing prospective business owners who come to the region with any and all resources they might need in order to establish themselves in Bakken. “We can sell industrial lots that are ready to build, we can build-to-suit for any industrial needs and we can sell or lease our existing industrial buildings. In addition we can provide financing, equity and consulting to other real estate developers.”
Land acquisition in Williston was the first order of business for the Lunnens. With a focus exclusively on industrial development, the Lunnens landed large deals which could be parceled out to new businesses.
For instance, Lunnen Real Estate Services acquired a significant portion of the Ponderosa Subdivision in northeast Williston, a commercially zoned industrial subdivision and proceeded to work with Quest Storage, Higher Power LLC, Northern Valley Electric, Green Light Energy and Metro Dakota Commercial. “That first project went very well for us,” Jeff says, “and we moved onto the next deal and we’ve just been doing deal after deal since then.”
Among the subsequent deals was the Valentina Subdivision, located at the intersection of Highways 85 and 2 and the 1804 Industrial Park, at the intersection of Highways 2 and 1804. “The subdivision was approved back in 2011, however, no building had taken place and none of the lots had sold,” Jeff says of Valentina, “We picked up the subdivision and started on some industrial projects right away.” Once Valentina was ready they made transactions with Coca Cola, which built a 50,000 sq. ft. distribution center, Weir Oil & Gas, Missouri Valley Petroleum, Bekks Hot Oil and Black Pine Group.
1804, on the other hand, is a work in progress. With an owner’s association and Development Agreement pending and a final plat to be completed within the month, the Lunnens aim to start infrastructure work by the spring, in the end providing 5-50 acre paved finished industrial lots for heavy industrial use.
“Our program has been to pick up lots that are either close to being completed, in the entitlement and development process or are already completed,” Jeff says, “we do a mix of lot sales, build-to-suit’s, and spec building going out to our database and the market to fill the space.”
Though Jeff’s own experience is dwarfed by his father’s, it is nonetheless formidable. He spent four years working as Director of Acquisitions and Entitlements on 14 different master-planned communities representing approximately 3,000 homes. After that he formed a partnership with Auction.com, the world’s largest real estate auction company. Jeff managed the sale of bank owned properties ranging from Coca-Cola Enterprises bottling/distribution centers, ski resorts, RV parks, airports, tentative maps, finished lots, business condos & retails centers.
The Lunnen construction arm, however, has been no less active, having erected a number of spec and build-to-suit complexes around Williston, particularly along Bean Drive. They have built over 50,000 sq. ft. of light industrial space comprised of 5 buildings. “I think we have eight different projects down there on Bean Drive, buyer/tenants include Twin Services Inc., Typhoon Excavation & JBG Enterprises Inc.” Jeff Lunnen adds.
The momentum in the Bakken region, however, is not without its drawbacks. “It’s been very hectic. There was so much going on. That made things a little difficult,” Tom says. “We kind of welcome this slowdown in oil prices.” “Hopefully that will drive out a lot of the people who come to town and start building without doing enough homework,” adds Jeff, “guys building expecting values that they’re never going to receive.”
To be sure, the setbacks are worth enduring for the ample rewards. “It was just nice to have an area where you don’t have to beat your brains in to make something happen,” says Tom. “In other states it becomes so bureaucratically overwhelming that you just can’t do anything profitable at the end of the day.” With that in mind, Lunnen Real Estate Services’ next aim is marketing.
“My strong suit is marketing and national and international exposure of real estate,” Jeff says. “We’ve really been focused on development and as oil prices drop over the next year or so, we will be expanding into marketing and commercial brokerage, it is a natural extension of our business.” Meanwhile, Tom & Jeff plan to take advantage in the pull back in oil prices to make some strategic acquisitions and position themselves for the rebound. Even amid oil price concerns, they remain confident. “We will be a well-positioned company in the Bakken because we have the development experience and financial wherewithal to make things happen there, we are committed to real estate development in the Bakken for the long run.”