Minnesota

Dougherty Mortgage Provides $15.9M HUD Loan for Affordable Seniors Housing Community in Minneapolis

by Kristin Harlow March 30, 2020

MINNEAPOLIS — Dougherty Mortgage has provided a $15.9 million HUD 221(d)(4) loan for the rehabilitation of Trinity Apartments, a 120-unit affordable seniors housing property in Minneapolis. All units at the eight-story building are restricted to heads of household over age 62 and are covered by a project-based Section 8 HAP contract. Under this program, the rents are subsidized by HUD. The borrower is Trinity Limited Partnership. The property will receive $6.7 million in renovation work, including dwelling unit and community space upgrades. In addition to the HUD-insured first mortgage, the project utilized low-income housing tax credits and tax-exempt bonds. Dougherty & Co., an affiliate of Dougherty Mortgage, underwrote the bonds. This is the second transaction to close under the new HUD 221(d)(4) pilot program through Minneapolis. The term is 40 years plus construction period with a 40-year amortization.

March 30, 2020

Indiana Loans Midwest Minnesota Retail

NorthMarq Arranges $23.1M in Financing for Two Retail Properties in Minnesota, Indiana

by Kristin Harlow March 27, 2020

ST. LOUIS PARK, MINN. AND FISHERS, IND. — NorthMarq has arranged two separate loans with different life insurance companies for two retail properties in Minnesota and Indiana. First, NorthMarq arranged an $18.3 million acquisition loan for Park Place Plaza in St. Louis Park. The 87,975-square-foot property consists of four multi-tenant retail buildings. The center was fully leased at the time of closing. Major tenants include PetSmart and Office Depot. The 10-year loan features a 25-year amortization schedule. The second loan totaled $4.8 million for the refinancing of Fishers Gateway Shops in Fishers. The 21,330-square-foot neighborhood shopping center, located at 9001 E. 116th St., was also fully leased at the time of closing. The 10-year loan features a 25-year amortization schedule. David Garfinkel of NorthMarq arranged both loans. He also secured a $19.5 million acquisition loan for a property in Washington on behalf of the same borrower.

March 27, 2020

Market Reports Midwest Midwest Market Reports Minnesota Multifamily

How Can Minnesota Apartment Developers Access Capital While Minimizing Risk? Structured Finance

by Kristin Harlow March 26, 2020

The Twin Cities of Minneapolis and St. Paul continue to be a very attractive marketplace for multifamily investing due to an average vacancy across the metro of 3.1 percent, as well as average 2019 rent growth of 5.8 percent, according to a recent report issued by Marquette Advisors. The Twin Cities currently has nearly 30,000 multifamily units in the development pipeline that are expected to be delivered between 2020 and 2022. With all of this development activity and an abundance of local and regional banks in the area, the Twin Cities continues to be a very well-banked market, particularly with regard to apartment construction. Local and regional banks are all very active. In addition, national banks are eager to invest in the healthy, consistent Twin Cities multifamily market. But despite capital being relatively plentiful and accessible, local, regional and national developers are exploring more efficient ways to capitalize on the abundance of development activity. They also pursue ways to stretch their own equity through a variety of financing alternatives. Developers may be tapped out with their current banking relationships, or as projects get larger and more expensive, desired loan sizes may drift higher than their banks’ lending limits. Lenders and …

March 26, 2020

Acquisitions Midwest Minnesota Multifamily

JLL Arranges Sale of 88-Unit Multifamily Building in Downtown St. Paul

by Kristin Harlow March 25, 2020

ST. PAUL, MINN. — JLL Capital Markets has arranged the sale of Rayette Lofts in downtown St. Paul’s Lowertown neighborhood for an undisclosed price. Originally constructed in 1909 and converted to multifamily space in 2014, Rayette Lofts features 88 units and more than 2,500 square feet of ground-floor retail space. Amenities at the seven-story building include a community room, fitness center, spin studio, rooftop deck and outdoor kitchen. The residential portion of the property was 96 percent occupied at the time of sale. The retail portion is fully leased to Saint Dinette, an American restaurant. Mox Gunderson, Dan Linnell, Josh Talberg and Adam Haydon of JLL represented the seller, Sherman Associates. JLL also procured the undisclosed buyer. The building first housed a millinery business before serving as the home of women’s hair product company Rayette. Prior to conversion into apartments, the building served as a parking garage.

March 25, 2020

Market Reports Midwest Midwest Market Reports Minnesota Retail

Influx of Out-of-State Capital Creates Cap Rate Compression in Twin Cities Market

by Kristin Harlow March 19, 2020

In 2019, the Twin Cities net lease retail market experienced a historic year, benefitting significantly from aggressive western U.S. capital. The Twin Cities saw an unprecedented number of buyers from the western United States who were willing to pay a premium above local buyers for quality net leased real estate. There were 95 net lease transactions in the Twin Cities in 2019 that sold below a 7.5 percent cap rate, according to CoStar Group. Of those transactions, 33 percent were sold to buyers based in the West Coast. What’s more, of the net lease properties that sold below a 6.25 percent cap rate, nearly 50 percent were sold to buyers based in the western U.S. In comparison, in 2018, only 25 percent of the net leased properties below a 6.25 percent cap rate in the Twin Cities sold to buyers based in the western U.S. This trend helped average cap rates compress for both net lease multi-tenant pad/strip centers as well as single-tenant cap rates between 2018 and 2019. The average multi-tenant net lease cap rate in 2018 was 7.25 percent versus 7.1 percent in 2019. The average single-tenant cap rate in 2018 was 6.7 percent versus 6.6 percent in …

March 19, 2020

Acquisitions Midwest Minnesota Retail

Boulder Group Arranges $3.3M Sale of Retail Property Net Leased to AT&T in Minnesota

by Kristin Harlow March 18, 2020

MAPLEWOOD, MINN. — The Boulder Group has arranged the $3.3 million sale of a newly constructed retail property net leased to AT&T in Maplewood, just east of St. Paul. The 4,305-square-foot building is located at 3070 White Bear Ave. across from Maplewood Mall. Jimmy Goodman and Randy Blankstein of Boulder represented the seller, a Midwest-based developer. An individual investor purchased the asset. The tenant, New Cingular Wireless PCS, is a wholly owned subsidiary of AT&T Corp. New Cingular Wireless is the primary corporate entity for AT&T’s retail stores with over 2,200 locations worldwide.

March 18, 2020

Acquisitions Industrial Midwest Minnesota

PCCP, Capital Partners Acquire Five-Property Industrial Portfolio in Metro Minneapolis

by Kristin Harlow March 17, 2020

MINNEAPOLIS — PCCP, in a joint venture with Capital Partners, has acquired a five-property industrial portfolio in metro Minneapolis for an undisclosed price. The light industrial portfolio spans 557,887 square feet and is currently 87 percent leased. The seller, Scannell Properties, developed three of the buildings within the last year. The specific locations of the properties were not disclosed, but they are situated in three different submarkets within the metro area.

March 17, 2020

Acquisitions Hospitality Midwest Minnesota

Marcus & Millichap Brokers $9.5M Sale of Holiday Inn Express Hotel in Minnesota

by Kristin Harlow March 12, 2020

MANKATO, MINN. — Marcus & Millichap has brokered the sale of the Holiday Inn Express Mankato for $9.5 million. Built in 2008, the five-story, 88-room hotel is located at 2051 Adams St. in southern Minnesota’s Mankato. Jake Erickson and Jared Plamann of Marcus & Millichap brokered the transaction. A Minnesota-based hotelier purchased the property from an undisclosed seller. The sales price represents a cap rate of 9.6 percent.

March 12, 2020

Hospitality Loans Midwest Minnesota

JLL Arranges $12.3M Refinancing for Moxy Hotel in Minneapolis

by Kristin Harlow March 11, 2020

MINNEAPOLIS — JLL Capital Markets has arranged a $12.3 million loan for the refinancing of Moxy Minneapolis Uptown, a 125-room boutique hotel in the Uptown submarket of Minneapolis. Completed in 2018, the hotel features a fitness center, business center, lobby lounge and bar, hot breakfast and valet parking. Gerard Sansosti, Jeff Bucaro and Nicole Aguiar of JLL arranged the five-year, fixed-rate loan on behalf of the borrower, Graves Hospitality. A newly formed debt fund provided the loan, proceeds of which were used to refinance the original construction loan. Moxy hotels are under the Marriott umbrella of properties.

March 11, 2020

Loans Midwest Minnesota Multifamily

Dougherty Mortgage Provides $23.8M Refinancing for Multifamily Property in Rochester, Minnesota

by Kristin Harlow March 10, 2020

ROCHESTER, MINN. — Dougherty Mortgage LLC has provided a $23.8 million Fannie Mae loan for the refinancing of Red44, a 159-unit, market-rate multifamily property in Rochester. The five-story community was built in 2017. Amenities include an outdoor pool, grilling area, dog park, community area, pet station, rooftop terrace, fitness center and heated garage parking. The 12-year loan features a 30-year amortization schedule. Mayowood Commons LLC was the borrower.

March 10, 2020

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