In a year that has so far been marked by out-of-state sellers entering or doubling down on the Twin Cities real estate market with high-dollar deals, Tuesday saw a Plymouth apartment building trade hands between two Minnesota-based firms for $46 million.
The Creekside Apartments were sold by St. Louis Park-based Bader to Minneapolis-based Heartland Realty Investors Inc., according to public documents.
The sale was facilitated by CBRE, according to a Tuesday press release. The apartment building at 200 Nathan Lane boasts 204 units, which brings the per-unit price to a little under $228,500.
According to CBRE Executive Vice President Keith Collins, the marketing for the transaction garnered 18 offers. According to the sale’s certificate of real estate value, the financing was an assumed mortgage, which Collins said let the final price tag be higher than normal.
Collins said the properties CBRE is marketing are getting eyes.
“There’s a lot of capital we think on the sidelines,” Collins said. “There’s more capital for suburban Twin Cities this proves that out.”
The interest rate of the assumed mortgage is 3.95%, which is a rate Andrew Babula, the director of real estate programs at the University of St. Thomas, said is very good.
“That is absolutely going to have a huge impact on a buyer’s willingness to pay more because the overall price might be more, but their actual monthly payments are going to be less,” Babula said.
Babula said there are investors in the core of the Twin Cities metro, and urban multifamily remains a strong asset class. After the pandemic, he said there have been some investors that have been more comfortable with suburban markets.
This is the first time Bader has sold the property, Collins said, since it was built in 2000. It features a fitness room, virtual bike studio and car wash area. The Property was renovated over the past four years, according to the press release.
The property comes with a balloon payment that kicks in after 66 months, or December 2029. Babula said it’s common for a loan to be taken out after a renovation. The loan would have a low interest rate and a longer amortization that would have come with balloon payment.
“The plan for the seller would have been to either sell it as (Bader) did or refinance it before that balloon payment, which that’s pretty typical for commercial properties,” Babula said.
Heartland did not respond to a request for comment.
This sale is the fourth highest apartment transaction of the year, according to a search of certificates of real estate value. Four out of the top six transactions that happened this year were from out of state, coastal-state buyers.
According to a Northmarq report, transactions in the multifamily market are up 13% from this time last year, while the median price-per-unit is $131,400.
In addition to Collins, Ted Abramson and Abe Appert worked on the deal for CBRE.
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