Affinity at Eagan sells for $40M

Welltower Inc., a Toledo, Ohio-based Real Estate Investment Trust, has closed on a nearly $40 million deal for the Affinity at Eagan apartment complex in Eagan, the second Affinity-branded property in the Twin Cities acquired by the company in the past week.

Welltower paid $39.765 million for the “active adult” community at 4000 Eagan Outlets Parkway, according to a certificate of real estate value made public late Monday. The seller is Affinity at Eagan LLC, an entity related to the Inland Group of Spokane, Washington, which developed the property.

The sale, which works out to $228,534 per unit, includes a $7.395 million down payment and a $32.37 million mortgage with monthly payments of $130,354, according to the CRV. A $28.7 million balloon payment is due on Nov. 1, 2030. The project’s 2024 assessed value is $40.425 million, according to Dakota County records.

Completed in 2018, Affinity at Eagan is near the Twin Cities Premium Outlets on a 2.7-acre site framed by Eagan Outlets Parkway, River Valley Way, Cedar Grove Parkway and Nicols Road. The four-story building includes a theater, library, office and conference rooms, a studio, fitness center, golf simulator, internet caf, an outdoor patio and an indoor pool, according to Eagle Building Co., the project’s general contractor.

Finance & Commerce reached out to Welltower and Inland for comment Tuesday morning.

The Eagan acquisition comes on the heels of Welltower’s $32.9 million cash deal for the 174-unit Affinity at Ramsey building in Ramsey. The Ramsey complex is at the southwest corner of Center Street and Ramsey Parkway and a few blocks from a Northstar commuter rail station. Both Ramsey and Eagan are “active adult” properties serving residents 55 and older.

In February, Welltower said it was under contract to acquire a portfolio of 25 Affinity communities for$969 million. The portfolio includes nearly 3,900 units, most of which are in the Pacific Northwest, Welltower said in a press release. Affinity Living Communities will continue to manage the portfolio, the release noted.

The portfolio’s per-unit cost of about $249,000“represents a significant discount to replacement cost for a highly amenitized portfolio with an average age of less than eight years,” according to the release.

“In Welltower, we found a partner with shared values and forward thinking. The Welltower partnership will enable us to enhance and extend our ability to execute our mission of creating thriving communities in which our engaged residents live full and happy lives,” Darin Davidson, Affinity’s president, said in the February 2024 press release. “I am incredibly proud of what we have built and the lives we have touched through our Affinity communities.”

Shankh Mitra,Welltower’sCEO, said, “OurWellness Housingportfolio helps address the significant and growing unmet demand for wellness focused rental housing for seniors. These communities provide thoughtful amenities and targeted social programming for empty nesters and active adults at moderate price points.”

Inland’s active adult portfolio includes Affinity communities throughout the country. As of Tuesday morning, the Eagan and Ramsey properties were still listed on Inland’s website .

Welltower invests in independent living, assisted living and memory care communities, according to its website. Inland’s website reveals that the company is “actively developing and constructing projects specifically focused around income- and age-restricted multifamily housing across the western and mid-west states.”

Jill Johnson, president and founder of Minneapolis-based Johnson Consulting Services , said Welltower is a “sophisticated player” in the senior market. Johnson said she wouldn’t be surprised if the company starts looking for other acquisition candidates in the Twin Cities to grow its footprint here.

“They are not a rookie by any stretch of the imagination,” Johnson said. “They understand the business of housing with older adults. There is a real difference between sophisticated folks like this and the one-off developers looking for a quick opportunity.”

RELATED: Eagan leads the pack for residential construction in May

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