Top 5 Transactions in the Twin Cities
- Apr 23, 2020
Transaction activity in the Twin Cities’ multifamily sector has been consistent over the past four years, with sales volume repeatedly exceeding the $1 billion mark, according to Yardi Matrix data. And while deal velocity started to slightly moderate in recent years due to the late stage in the real estate expansion, 2019 was still a good year for sales, with transaction volume totaling $1.2 billion.
As the effects of the COVID-19 crisis enveloped all aspects of the global economy, the impact of the outbreak on multifamily investment has yet to become clear. Sales activity was steady in the first quarter of 2020 in Minneapolis-St. Paul—a total of $226 million in multifamily assets changed hands. Highlighted below are the top five transactions completed in the metro in the first three months of the year, according to Yardi Matrix data.
5. The Tradewinds
The 120-unit community changed hands for $12.1 million in early February when a private investor sold the asset to Relay Properties for $100,417 per unit. The buyer financed the acquisition with a $9 million Fannie Mae loan, originated by Greystone Servicing Corp.
The permanent, long-term financing carries a 3.72 percent fixed rate, with maturity scheduled for March 2021. Completed in 1968, the property previously traded for $7.6 million in August 2012 and is located at 8200 45th Ave. N. in New Hope, Minn.
4. Rayette Lofts
The Goodman Group paid $21.2 million, or $240,909 per unit, for the Class A community in March. Seller Sherman Associates had purchased the historic Rayette Building in 2001 and continued to operate it as a parking garage. In 2014, Sherman Associates accessed $7.6 million in federal and state historic tax credit and converted the structure into 88 market-rate apartments.
Originally constructed in 1909, the building housed several businesses over the years and became a parking garage in 1997. The repurposed asset is located at 261 E. Fifth St. in St. Paul’s Lowertown.
3. Village Club of Bloomington
The $44.8 million acquisition closed in early January, with Aeon paying $146,467 per unit to Village Green Management for the 306-unit community. The buyer received $7 million in financing from the City of Bloomington’s Affordable Housing Trust Fund, a $15.2 million fund established to preserve affordable housing.
Additionally, the City of Bloomington was awarded $27 million in Housing Revenue Bonds, which will support Aeon in the development of another 165 affordable housing units on site. The Village Club Apartments is an example of naturally occurring affordable housing, otherwise known as NOAH—properties that have aged into affordability.
Sentinel Real Estate became the new owner of the 213-unit community after shelling out $54.6 million in January. BlackRock sold the Minneapolis asset for $256,338 per unit. Located at 1367 Willow St., Eitel is the redevelopment of the historic Eitel Hospital, originally constructed in 1912.
Developer Village Green Cos. preserved part of the hospital and added 179 units to the structure. In a partnership with BlackRock, Village Green completed the adaptive reuse project in 2008 with the help of a $32.5 million Freddie Mac loan.
1. Huntington Park
The Huntington Park deal marks Aeon’s second Twin Cities acquisition in the first quarter of 2020. The state’s second-largest affordable housing property traded for $75 million, or $89,928 per unit. Seller Dominium had owned the 824-unit mega-complex since 1996.
The property represents another NOAH example—Aeon aims to preserve its affordability with help from the Twin Cities Local Initiatives Support Corp. and National Equity Fund, which combined $76.6 million of local and national resources for this deal. The six-building community located at 5805 73rd Ave. N. in Brooklyn Park, Minn., houses more than 1,000 residents and was completed in 1969.
Yardi Matrix covers all multifamily properties of 50+ units in size across 133 markets in the United States. This ranking reflects transactions for properties within that sample group.