Minnesota

Strong Regional Economy Propels Minneapolis Retail Market

by Kristin Harlow September 7, 2023

By Tricia Pitchford and Amy Senn, Mid-America Real Estate A strong regional economy continues to propel the retail real estate market in Minneapolis heading into the fall. Unemployment remains lower than the national average, though up from last year’s remarkable sub-2 percent. New jobs are being created at a nice clip. At the same time, retail real estate space is tight, with limited new construction. Well-located spaces are being re-tenanted quickly. The same is generally true for B and C locations. Rents are flat to increasing. Higher construction costs continue to hamper tenant expansion. Although the macroeconomy is slowing, consumers are proving resilient, with a large appetite (pun intended) for quick-service restaurants and personal services, in particular. Where’s the most action? Suburban trade areas are seeing most of the activity across the metro area. Maple Grove, Woodbury, Edina and Roseville are among the strongest submarkets. A couple of urban trade areas, namely the North Loop warehouse district and Northeast Minneapolis, stand out for their growing appeal as arts, entertainment and dining districts. (Yes, we have hipsters in the Twin Cities.) Generally infill and redevelopment opportunities are more time-consuming and costly to execute than ground-up development, but that’s not stopping the …

September 7, 2023

Loans Midwest Minnesota Multifamily

Marcus & Millichap Arranges $13.6M Loan for Refinancing of Minnesota Multifamily Property

by Kristin Harlow September 6, 2023

LAKE ELMO, MINN. — Marcus & Millichap Capital Corp. (MMCC) has arranged a $13.6 million loan for the refinancing of The Fields at Arbor Glen in Lake Elmo, an eastern suburb of the Twin Cities. The age-restricted property was recently built and features a mix of one- and two-bedroom units in the main building as well as nine townhouse duplex units. Michael Hughes of MMCC arranged the five-year, fixed-rate loan with an interest rate of 5.85 percent and interest-only payments for six months. The loan features a 30-year amortization schedule and a 65 percent loan-to-value ratio. A local credit union provided the loan.

September 6, 2023

Acquisitions Midwest Minnesota Office

Transwestern Brokers Sale of St. Paul Office Building, Buyer Plans Multifamily Conversion

by Kristin Harlow September 1, 2023

ST. PAUL, MINN. — Transwestern Real Estate Services has brokered the sale of Landmark Towers, a 200,000-square-foot office building in St. Paul. The buyer, Sherman Associates, intends to convert the property into apartment units. Mike Salmen and Erik Coglianese of Transwestern represented the undisclosed seller. The property is located at 345 Saint Peter St.

September 1, 2023

Acquisitions Midwest Minnesota Multifamily Retail

JLL Arranges $8.5M Sale of Historic Apartment, Retail Building in Duluth, Minnesota

by Kristin Harlow September 1, 2023

DULUTH, MINN. — JLL Capital Markets has arranged the $8.5 million sale of Canal Park Square in Duluth. The property comprises 29 apartment units along with retail space in the city’s Canal Park neighborhood. Originally constructed in 1886, the building underwent a redevelopment in 2015 to convert the second-story office space into luxury apartments. Units average 835 square feet, and amenities include a clubroom and fitness center. Retailers include 310 Pub, Green Mill, Love Creamery, Cloud 9 Bistro, Canal Park Liquor and Rue 48 Salon. Devon Dvorak, Mox Gunderson, Dan Linnell, Josh Talberg and Adam Haydon of JLL represented the seller, Sherman Associates. The buyer was undisclosed.

September 1, 2023

Loans Midwest Minnesota Multifamily

JLL Arranges $68.9M in Construction Financing for Apartment Community in Suburban Minneapolis

by Kristin Harlow August 31, 2023

EDEN PRAIRIE, MINN. — JLL Capital Markets has arranged joint venture equity and construction financing totaling $68.9 million for Golden Triangle Station, a 237-unit apartment community in the Golden Triangle neighborhood of Eden Prairie. Greco and Eagle Ridge Partners were the borrowers. JLL arranged a $47 million construction loan through a regional bank and $21.9 million in joint venture equity from Amstar Group. Slated to break ground this fall, the project will include 315 underground parking spaces. Units will come in studios, one-, two- and three-bedroom layouts. Amenities will include an outdoor pool, spa, theater room, clubroom, private dining and pickleball courts. As part of Eden Prairie’s inclusionary zoning, roughly 25 percent of the units will be rented at 50 and 80 percent of the area median income. As a result, the project has received support from city staff, including the approval of a tax-increment financing structure. Josh Talberg, Scott Loving, Matthew Schoenfeldt, Colin Ryan, Dan Linnell and Mox Gunderson made up the JLL team representing the borrower.

August 31, 2023

Industrial Market Reports Midwest Midwest Market Reports Minnesota

Minneapolis Industrial Market Remains Strong Despite Current Debt Challenges

by Kristin Harlow August 31, 2023

By David Berglund, JLL The Minneapolis-St. Paul industrial real estate market continues to show strength as tenant demand and leasing activity keep vacancies low and absorption steady. In the second quarter of 2023, there were more than 4 million square feet of leasing and 523,641 square feet of net absorption, which pushed vacancy rates down slightly to 3.6 percent. In addition, roughly 800,000 square feet of speculative development was removed from the market. Currently, there is just 2.7 square foot of available space for every square foot of tenant demand. Year-to-date absorption was nearly 2 million square feet, led by the Northwest submarket with nearly 1.3 million square feet of that total since January. The Northwest submarket has been leading in absorption in four of the past six quarters. Asking rents increased to $6.21 per square foot and first-year rents continued to climb to $9.13 per square foot, reflecting an 11.5 percent growth over 2022. With very low vacancy and limited supply coming, we are continuing to see favorable conditions for landlords in the Twin Cites industrial market. New high-water marks for rents will likely continue into 2024. Investment sales, however, tapered off significantly as the impact of several incremental …

August 31, 2023

Acquisitions Midwest Minnesota Multifamily

JLL Brokers $74.7M Sale of Millennium Edina Apartment Complex in Suburban Minneapolis

by Kristin Harlow August 29, 2023

EDINA, MINN. — JLL Capital Markets has brokered the $74.7 million sale of Millennium Edina, a 227-unit apartment complex in the Minneapolis suburb of Edina. Completed in 2021, the property features studio, one-, two- and three-bedroom units averaging 905 square feet. Amenities include a green roof, yoga studio, game room, golf simulator, movie theater, fitness center, sunset terrace, outdoor pool and coworking spaces. Josh Talberg, Mox Gunderson, Dan Linnell, Adam Haydon and Devon Dvorak of JLL represented the seller, a joint venture between Dakota Pacific Real Estate and Landmark Cos. The team also procured the buyer, a private investor. Brock Yaffe led the JLL capital markets debt advisory team that originated acquisition financing through Fannie Mae.

August 29, 2023

Affordable Housing Development Midwest Minnesota Multifamily

Lupe Development, Wall Cos. Open 143-Unit Affordable Housing Community in Minneapolis

by Kristin Harlow August 16, 2023

MINNEAPOLIS — Lupe Development and Wall Cos. have opened The Flats at Malcolm Yards, a 143-unit affordable housing community in Minneapolis. A grand opening celebration will take place Thursday, Aug. 17. The project is the latest addition to the new Malcolm Yards neighborhood, following The Market, an urban food hall, and The Station, a 210-unit market-rate apartment project. The Flats features a mix of studios, one- and two-bedroom units, all of which are reserved for residents who earn 60 percent or less of the area median income. Amenities include underground parking, a fitness center, business center, coffee bar and sky lounge with views of the Minneapolis skyline. The development is situated near the Green Line LRT station and the University of Minnesota transitway. The project received funding support from the City of Minneapolis Affordable Housing Trust Fund and the Minnesota Department of Employment and Economic Development as well as Hennepin County’s Affordable Housing Incentive Fund, Transit Oriented Development Program and Environmental Response Fund. Other investors include Allianz Life and R4 Capital, which was the tax-exempt lender.

August 16, 2023

Civic Development Midwest Minnesota

Kraus-Anderson Breaks Ground on $11.4M Environmental Facility in Forest Lake, Minnesota

by Kristin Harlow August 15, 2023

FOREST LAKE, MINN. — Kraus-Anderson has broken ground on the Northern Environmental Center, an $11.4 million environmental and yard waste center in Forest Lake, about 27 miles northeast of St. Paul. Designed by HCM Architects, the 30,000-square-foot county facility will serve northern Washington County. The project will include loading docks and covered drop-off areas, as well as an adjacent yard waste drop-off and pickup areas. Completion is slated for May 2025.

August 15, 2023

Civic Development Midwest Minnesota

Kraus-Anderson Begins $24M Renovation, Expansion of Central Middle School in Suburban Minneapolis

by Kristin Harlow August 8, 2023

WHITE BEAR LAKE, MINN. — Kraus-Anderson (KA) has begun a $24 million renovation and expansion of Central Middle School in White Bear Lake, a northeast suburb of Minneapolis. Designed by Wold Architects and Engineers, the 108,000-square-foot project will add a new gym and fitness area, expand the kitchen and cafeteria and renovate the former district office to create additional classroom spaces. There will also be updates to the classrooms, media center, flex areas and learning commons. Completion is slated for late summer 2025. KA is also completing a $5.8 million expansion at Oneka Elementary School in Hugo, Minn. Both of these projects are part of a $326 million building bond passed by White Bear Lake Area School District voters in 2019.

August 8, 2023

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