IRET Sells 10-Property Portfolio to 2 Buyers

The communities total 969 units across seven assets in South Dakota, Iowa and Nebraska.
One of the Sioux Fall properties. Image courtesy of JLL and IRET

IRET has exited the Sioux Falls, S.D., and Sioux City, Iowa, markets with the sale of 10 apartment communities consisting of 969 units for a total of $78 million to two buyers—Monitor Finance and Monarch Investment & Management Group. The occupancy for the total portfolio at sale was 93 percent.

The company declined to break down the total sale price but Monitor Financed purchased the seven Sioux Falls properties and Monarch Investment & Management Group acquired the three properties in Sioux City, according to JLL.

JLL marketed the portfolio exclusively on behalf of IRET. The JLL Capital Markets team representing the seller included Senior Vice Presidents Mox Gunderson, Dan Linnell and Josh Talberg; Vice President Adam Haydon and Senior Director David Gaines.

Portfolio breakdown

The Sioux Falls tranche totaled 526 units and was comprised of Cottage West, Gables Townhomes, Oakmont Estates, Oakwood Estates, Oxbow Park, Prairie Winds and Sierra Vista. The properties were completed between 1985 and 2000 and are near major thoroughfares, including interstates 29 and 90. They are also close to leading employment centers and entertainment venues.

The properties in the Sioux City market are Indian Hills and Ridge Oaks, both in Sioux City, and Arbors Apartments in nearby South Sioux City, Neb. They have a total of 444 units and were built between 1970 and 1998. The properties are all located within 5 miles of the city center, which provides residents access to downtown employers and major retailers.

IRET plans to use proceeds from the transactions to pay down borrowings on the company’s revolving line of credit and to retire $12.3 million of mortgage debt while it seeks additional acquisition opportunities. The company will finish 2019 with aggregate dispositions of approximately $188 million. So far this year, IRET completed $169.3 million of acquisitions.

Mark Decker Jr., president & CEO of IRET, said in a prepared statement the company plans to be opportunistic with dispositions while buying assets in its strategic markets of the Twin Cities in Minnesota and Denver.

The company purchased the 328-unit Lugano at Cherry Creek for $99.2 million and the 96-unit FreightYard Townhomes & Flats in Minneapolis for $26 million in October. It had exited the Topeka, Kan., market at the same time, selling its entire 1,042-unit portfolio for $82.8 million. It had previously paid $128.7 million for Westend, a 390-unit upscale community near downtown Denver.

Monarch Moves

Meanwhile, Monarch has also been active this year. In July, the firm acquired the 176-unit Avalon at Carlsbad, N.M., from a private investor. Also in July, Monarch acquired a 240-unit community called Homestead in Hobbs, N.M., from Gold Creek Homes. Those transactions came just a few months after Monarch purchased a five-property, 665-unit portfolio in Jackson, Tenn., from McDowell Properties in April.