A new ownership partner is on board for the recently built Lexington Lofts apartment complex in the Circle Pines-area community of Lexington.
Lexington Lofts LLC, an entity related to Forest Lake-based Norhart, sold a portion of its interest in the two-building, 355-unit complex at 9001 Griggs Ave. for $44.6 million, according to a certificate of real estate value made public this week.
The buyer is an entity related to Sterling Management Group of North Dakota. Sterling provides services related to the “acquisition, disposition, investment, financing, ownership, and management of multifamily and commercial real estate properties,” according to its website.
The transaction leaves Norhart with 40% ownership in Lexington Lofts and Sterling with 60%, said Norhart CEO Mike Kaeding, who described the transaction as an off-market deal. The partners formed a new joint venture called SRENOR1 LLC.
“The deal was a partnership with Sterling. We sold off some of the shares of the company to generate more capital for us to do more projects,” Kaeding said.
Norhart has been staying busy with at least two big apartment projects in the east metro.
In Oakdale, the developer is building a 328-unit, seven-story building near Interstate 694 and I-94. The project is across the street from a Gold Line bus rapid transit station and features amenities such as co-working space, a rooftop Zen garden, and penthouse suites with 22-foot-high windows and views of downtown Minneapolis and St Paul.
Norhart is also planning a 299-unit building at the southwest corner of 100th Street and Hadley Avenue in Cottage Grove.
Finance & Commerce reported in May 2023 that the Cottage Grove project is the first multifamily proposal near Northpoint’s planned 3.4 million-square-foot industrial park. Kaeding said Thursday that he hopes to break ground on the Cottage Grove project in the next couple of months.
“The capital markets are so tricky right now, but as soon as we get the remaining part of the financing, we'll be there,” he said.
Norhart developed Lexington Lofts project in phases, with the third and final phase wrapping up in the last couple of years.
Lexington Lofts offers apartments ranging in size and cost from about $1,300 per month for a studio to $2,350 for a three-bedroom unit, according to Norhart’s website . Kaeding describes Lexington Lofts as a higher-end multifamily property with a two-story main entrance, a pool, a game room, and a 3,000-square-foot sky lounge and other amenities.
Kaeding said Norhart doesn’t sell a lot of properties, but “we do get people reaching out fairly regularly interested to buy. So I know there's interest in the market.”
Lexington, an Anoka County town of about 3,000 residents, borders Circle Pines and is roughly 15 miles north of downtown Minneapolis.
Bill Petracek, Lexington’s city administrator, said Norhart does quality work and that Lexington Lofts has leased up well and has been “a great addition to our little community.”
In the past six or seven years, Lexington has worked with three developers, including Norhart, to add about 1,000 apartment units to the city’s housing stock, Petracek said. Lexington was “a built-out community, so we started building up” to meet demand for new housing, he said.
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