Top 10 Twin Cities Multifamily Transactions
The market’s strength has attracted a number of out-of-state investors such as TIAA, FPA Multifamily and Mapletree US Management that paid significant prices for top communities in the area.
The Minneapolis-St. Paul multifamily market has one of the highest occupancy rates among major U.S. metros according to the latest Yardi Matrix report. Deliveries are hardly keeping up with demand, resulting in rental growth well above the national average.
Investor appetite remains high, with significant out-of-state capital pouring in and especially targeting recent deliveries. Old suburban stock represents another attractive asset class, as investors are also considering renovating them into higher-rent housing.
10. The Ellipse on Excelsior ($56.9 million)
Chicago-based Mesirow Financial paid Bader Development $56.9 million for the 190-unit community in St. Louis Park. The transaction was partially financed through a $36.5 million loan originated by Allstate Life Insurance Co. Located at 3920 Excelsior Blvd., the asset consists of a 132-unit building which was delivered in 2010 and the next-door e2 building which was completed in 2013 and encompasses 58 units. In addition to the residential component, the property includes 16,000 square feet of retail space occupied by Mill Valley Kitchen and other businesses.
9. The Bridges ($60.7 million)
The Bridges—a 210-unit, 360-bed student housing community—is one of the recent acquisitions of TH Real Estate, the investment management arm of TIAA. The previous owner, developer Doran Cos., sold it as part of a $93 million portfolio deal, which also included The Knoll, another nearby student housing community. The Bridges itself cost $60.7 million. Completed in 2014 at 930 University Ave. S.E., the property provides residents walking accessibility to the University of Minnesota’s campus and Dinkytown. Monthly rents average $2,000.
8. Parkway ($61 million)
The 375-unit Eden Prairie community changed hands at the beginning of 2018 in a $61 million deal. San Francisco-based FPA Multifamily bought it from Trilogy Real Estate Group for almost $20 million more than what its previous owner paid for it six years ago. Parkway is located on 28.7 acres at 13905 Chestnut Drive and is comprised of five three-story buildings. Amenities include a fitness center, business center, clubhouse, playground, three swimming pools and a parking lot accommodating up to 563 spaces. The community features a unit mix of one-, two- and three-bedroom layouts whose monthly rent averages approximately $1,300.
7. Oxbo ($61.5 million)
The Opus Group broke ground on Oxbo, a 191-unit community in St. Paul, in 2015 and delivered it in spring 2017. The property is the first fully privately financed mixed-use multifamily development to be completed in downtown St. Paul in nearly two decades. A few months after its opening, it became the recipient of the Economic Development Association of Minnesota’s Redevelopment Project of the Year award. In the summer of 2017, Opus sold it to North Dakota-based Investors Real Estate Trust for $61.5 million. Oxbo is located at 202 7th St. W., at the former site of the Seven Corners Hardware store.
6. Stadium View ($69.4 million)
Located at 2508 Delaware St. S.E., Stadium View is a 277-unit student housing community which features two-, three- and four-bedroom layouts. University Partners acquired it at the beginning of 2018 from Place Properties for $69.4 million, in a transaction which was partially financed through a $49 million Freddie Mac loan arranged by HFF. The seller was Blue Vista Capital Management. The apartments average 1,100 square feet, are fully furnished and feature a complete appliance package, stackable full-size washer and dryers, individually keyed bedrooms and wall-to-wall carpeting. Common area amenities include a fitness center, game room, yoga studio, 24-hour concierge desk and Wi-Fi throughout the property.
5. Vintage on Selby ($87 million)
Vintage on Selby is a mixed-use community located at 1555 Selby Ave. which consists of 210 units and 39,000 square feet of retail space which functions as a Whole Foods store. Zurich Alternative Asset Management bought it from Ryan Cos., in the third quarter of 2017 for $87 million. The property provides a variety of amenities such as a rooftop terrace with a swimming pool, a gourmet kitchen, fitness center, yoga room and a natural turf backyard. Units average in size from 420 to 2,500 square feet while monthly rent averages $2,000. In April Vintage on Selby was approximately 92 percent occupied.
4. Park Place ($92.3 million)
Park Place is the second community on the list to be acquired by IRET during the past 12 months. Raith Capital Partners sold it in the fall of 2017 for $92.3 million, after managing it for only one year. Located at 14550 34th Ave. N. in the desirable Plymouth suburb, Park Place consists of four buildings totaling 500 one- and two-bedroom units. One additional building serves as the community’s clubhouse. The entire property, which was completed in 1985, spans almost 36 acres, being surrounded by gardens. Average monthly rent is $1,400.
3. The Grand Reserve at Eagle Valley ($96.8 million)
Last summer, Invesco Real Estate sold the 394-unit Woodbury community to an affiliate of New York-based Goldman Sachs for $97 million. The transaction closed at almost $40 million over the price Invesco paid for the asset in 2006. The property is located at 10285 Grand Forest Lane and was developed 18 years ago by Del American Inc. and LeCesse Development Corp. It consists of 49 buildings and offers a variety of amenities such as a waterscape, fitness center, business center, clubhouse, volleyball court, playground, swimming pool, spa and direct access to an enclosed garage. Units rent for a monthly average of $1,600.
2. Latitude 45 ($212.3 million)
The 322-unit downtown community changed hands in the summer of 2017, being part of a $1.6 billion portfolio transaction which also included WaHu. The new owner, Mapletree US Management, purchased the property from Kayne Anderson Capital Advisors for $217.3 million. Latitude 45’s unit mix consists of studio, one-bedroom, two-bedroom and penthouse layouts ranging in size from 400 to 1,200 square feet. In addition to the residential component, the property offers 10,000 square feet of retail space. Occupancy rate in April 2018 was 94 percent while monthly rent averaged $2,000.
1. WaHu ($222 million)
The most expensive transaction closed during the last 12 months in Minneapolis-St. Paul involves WaHu, a 329-unit student housing community. The asset cost Mapletree US Management $222 million. Built in 2015 at 1000 Washington Ave. S.E., WaHu consists of studio, one-, two-, three- and four-bedroom apartments which can be rented for a monthly average of $2,300. Amenities include a fitness center, business center, clubhouse, swimming pool, spa media room and covered parking. In addition to the residential units, the property also includes almost 25,000 square feet of retail space.
This list highlights the metro’s top 10 transactions closed during the last 12 months, based on price information from real estate data provider Yardi Matrix.
Images courtesy of Yardi Matrix