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Sanford details plans for Capital One building

January 04, 2017

Sanford Health will create an administrative center at the northeast Sioux Falls office building most recently occupied by Capital One.

The health system recently signed a 15-year lease on the space at 2200 E. Benson Rd.

The plan is to consolidate various corporate services that had been spread around town into the 158,000-square-foot building.

“We’ve been looking for quite some time,” chief marketing officer Cindy Morrison said. “We had these (services) in multiple locations across the city and were looking for a building that would bring them all together.”

Sanford plans to move hundreds of employees into the building. About 1,000 people worked there when Capital One leased it. The financial services company pulled its call center operation out of South Dakota last year. Prior to that, the building was occupied by HSBC before it was acquired by Capital One.

While Sanford is still planning the move, the idea is to locate payroll functions, some patient financial services and corporate human resources in the building.

The Sioux Falls-based services support the entire Sanford system, which includes 26,000 employees. Many initial interview screenings will occur in the newly leased space, Morrison said.

“We are hiring the best and the brightest,” she said. “We want them to feel welcome and to be in a very nice environment. That will be a front door.”

The moves will start some time in 2017 and involve several hundred employees, she said.

The building’s location not far from Sanford’s headquarters in northeast Sioux Falls added to its appeal.

“We got the building with the right layout for the right services in the right location. That doesn’t happen often,” Morrison said. “And the building has these beautiful blue awnings, and at Sanford we kind of like the color blue. We said, ‘This couldn’t have been a better package.’ It has everything.”

The building was on the market for about six months and listed with Bender Commercial Real Estate Services on behalf of the former tenant, Capital One, which still had a lease in place.

“It is a remarkable call center facility,” said Bender partner Nick Gustafson, who co-listed it with Michael Bender. “Capital One made significant investments to it prior to leaving our market.”

The listing generated quite a bit of activity, he said.

“We toured credit card operations, collection agencies, biotech and of course health care organizations through,” Gustafson said. “By mid-summer we had several offers on the table for the entire facility. Our client, Capital One, was surprised and excited to have such a high level of interest so quickly.”

Sanford ultimately ended up leasing the building through its owner, a Chicago-based investment group that was represented by Dennis Breske of NAI Sioux Falls.

Breske called it a rare opportunity for Sanford to coordinate services in one of the city’s largest office buildings.

“I can only think of two other buildings of this size,” he said. “Citibank’s campus and Premier Bankcard’s new building. They (Sanford) would have had to lease 30,000 square feet here and 25,000 there. And this is four blocks from their world headquarters. It’s on the way. You drive by it.”

As an added bonus, Capital One also left its space equipped with office furniture, computers and fixtures.

“That’s not that uncommon,” Breske said. “It’s so expensive to take it apart and reassemble it. Those two costs can exceed the value of the furniture.”

Courtesy of Jodi Schwan, Sioux Falls Business Journal