MREJ July 2018

VOLUME 34, NUMBER 7

©2018 Real Estate Publishing Corporation

July 2018

Twin Cities Senior Housing Market is Booming

By Liz Wolf

S

enior housing developments are popping up around the Twin Cities metro area in anticipation of Minnesota’s so-called “silver tsunami” – the massive wave of baby boomers entering their golden years. The state of Minnesota has 1.5 million baby boomers.

Currently, 2,018 new senior housing units are

recently completed or under construction and projected to open by year-end 2018, and another 2,470 units are projected to come on line in 2019, according to Jay Thompson, president of Viewpoint Consulting Group Inc., who tracks senior housing development. That projected 2019 number is based on developments that have broken ground in 2018 and are anticipated to break ground this year.

The need for senior housing is massive. According to the Metropolitan Council, by 2040, one in every

five residents of the Twin Cities region will be age 65 or older. The 65 and over population is the state’s fastest-growing age group. Even more eye-opening is the Twin Cities region’s senior population will more than double, growing from 307,000 in 2010 to 797,000 in 2040 as baby boomers continue to age and life expectancies increase. By 2040, seniors will make up 21 percent of the region’s population.

Senior Housing to page 10

Doran sets new bar with amenities at The Reserve at Arbor Lakes

T

he Reserve by Doran has caught the eye of numerous apartment-goers with more than 20 unique amenities. The reaction to the clubhouse and central terrace has been a huge factor in our early success. “As Kelly Doran says, it truly is a resort without the golfcourse, and people feel that when they walk in the front door,” says Tonya Tennessen, VP of Communications.

The four-story complex boasts more than 80,000 of amenity spaces; 25,000 square foot of which is the clubhouse alone. The clubhouse itself includes a club-

room, entertainment suites with chef-quality kitchens, a private movie theater, business center, indoor pool and sauna, fitness center, game room and more. An expansive central terrace includes a full-sized outdoor pool, spa, putting green, bocce ball court, grilling stations and lounge areas. Additionally, a plaza on the east grounds includes spacious walkways, gardens, grilling stations and outdoor lounge areas, not to mention pet grooming, a golf simulator and a pet park. And the fitness center has a play area for your kids while you

work out.

The total development is also comprised of 243 apartments, 12 townhomes, and 2 guest suites.

Located in the Arbor Lakes area of Maple Grove, The Reserve is within walking distance of The Shoppes at Arbor Lakes and just steps away from area coffee shops, farmer’s market and bars and restaurants.

Several miles of pedestrian and bike pathways connect The Reserve to other parks in the region – including The Reserve to page 14

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July 2018

Minnesota Real Estate Journal

Featured Stories

JULY 2018 • VOLUME 34, NUMBER 7

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Departments PEOPLE ON THE MOVE 4 CLOSINGS

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WOMEN CONTINUE TO MAKE PROGRESS IN CLOSING THE GENDER GAP IN COMMERCIAL REAL ESTATE DORAN SETS NEW BAR WITH AMENITIES AT THE RESERVE AT ARBOR LAKES

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BLOCKCHAIN'S POTENTIAL IMPACT ON THE COMMERCIAL REAL ESTATE INDUSTRY

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COLDWELL BANKER COMMERCIAL FISHER GROUP STAFFS UP HARRIMAN AND DEBATES TAKE NEW ROLES

University of St. Thomas MBA student Ivan Alvarado selected for Commercial Real Estate Diversity Collaborative Scholarship

Coldwell Banker Commercial Fisher Group (CBC Fisher Group) has created two new roles, Director, Innovation & Operations and Director, Growth & Engagement. The new positions will work to advance the business and provide superior services in the areas of market research, public relations, property management and client services.

The roles will be filed by Eric Harriman (Dir. Innovation & Operations) and Cate DeBates (Dir. Growth & Engagement). Harriman (Dir. Innovation & Operations) was an internal hire, having worked at CBC Fisher Group since July 2017. Harriman is also a Commercial Agent with the organization and will be responsible for upgrading systems and technology. Harriman will also oversee property management and maintenance. Harriman was previously employed as the Executive Director of the City Center Partnership with Greater Mankato Growth, and is a graduate of Minnesota State University, Mankato. DeBates (Dir. Growth & Engagement) comes to CBC Fisher Group from her previous role as the Donor Relations Manager with YWCA Mankato. Prior to her role at YWCA Mankato, she was the Associate Director of Alumni Relations at Minnesota State University, Mankato. DeBates comes to CBC Fisher Group with more than 8 years of experience in public relations, marketing and event management specific to the Mankato area. Her role will focus on client services, recruitment and marketing. David Schooff, President and Owner of CBC Fisher Group is excited for the advancement. “The addition of these positions is essential for continuing to be the regional leaders of commercial real estate. Eric and Cate come with complimentary strengths that are just what we need for the next generation of CBC Fisher Group.” Harriman has been in his new role since May, and DeBates will start in her new role with CBC Fisher Group this Monday, July 16.

Ivan Alvarado, a bilingual MBA student at the University of St. Thomas, has been awarded the Commercial Real Estate Diversity Collaborative’s Spring 2018 scholarship. The Diversity Collaborative, which represents eight industry associations working to increase diversity within the commercial real estate industry, has awarded 10 scholarships to diverse students studying commercial real estate. The $2,000 scholarship supports tuition and books for students from a minority class who are interested in pursuing a career in commercial real estate.

Alvarado, who was born in New York City, but raised since high school in Minneapolis, Minnesota, has worked as a residential real estate agent, a project manager, an English teacher in Spain, and most recently, in multi-functional roles for the Fourth Judicial District Court in Minneapolis. With more than ten years of working experience, he identified commercial real estate as the best fit for his long-term goals.

“Making a difference in the lives of others is my purpose in life and a career in commercial real estate will help me create meaningful change in my community,” he said.

Each scholarship applicant requires a letter of recommendation from an educator; for Alvarado, Hannah Hedegard, director of Graduate Programs at the Opus College of Business, University of St. Thomas, submitted rave reviews about his insights and ideas that have already improved the St. Thomas experience.

“It cannot be understated the impact that Ivan has had during his time at our university. He’s proven himself to be a leaders who is thoughtful, engaging, and a true change-maker in our community and beyond,” she wrote.

“We were impressed that the first time we met Ivan, he had visions for his career and his impact in our communities,” said Raymond Vaughn, CCIM, RPA, senior property manager-Ryan Companies and chair of the Diversity Collaborative’s scholarship committee.

July 2018

“He’s already taken initiative to apply his passion to support the success of the Diversity Collaborative going forward.”

The Diversity Collaborative has been awarding scholarships since 2013, distributing more than $25,500 in educational support for diverse students who demonstrate an interest in commercial real estate as a career path. In addition to the scholarship, students also are invited to attend industry events, are matched with a commercial real estate professional for mentoring and are provided internship openings from the commercial real estate companies who participate in the DC. “Our goal is to develop bench strength with diverse candidates who can build their careers around any firm in our market,” said Stephanie Lee, vice president-Carlson Commercial and one of three leaders of the Diversity Collaborative. “We have built partnerships across the Twin Cities but are always looking for mentors, volunteers and companies to join us in our efforts to diversity commercial real estate.”

SPEDCO Names SageMartinson New CEO Jonathan Sage-Martinson has been named the new Chief Executive Officer of SPEDCO, a leading non-profit certified development company based in Arden Hills.

With more than 20 years of experience promoting economic development with nonprofit organizations, foundations and government entities, SageMartinson, will head up the Small Business Administration lending partner as it seeks to build new market opportunities and expand the organization’s impact.

“I am excited to join an organization with such a strong track record for impact and a reputation for quality,” stated Sage-Martinson. “The combination of a solid staff team and a board interested in seeking innovative ways to expand our work makes this a great time to join SPEDCO.”

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Mortenson, Hyde Acquire 177,000-SF Addition to $125M Business Park Demand for Industrial Space at Northern Stacks Remains Strong with 93% Occupancy Rate The developers of Northern Stacks business park in Fridley, MN, have paid $6.9 million – nearly $4 million under the asking price – for a 177,264-squarefoot building nearby.

Minneapolis’ Hyde Development and Golden Valley-based M.A. Mortenson Co. plan to spend $1.2 million to remediate the site and another $2 million to bring the building up to current industrial standards.

The seller of the 36-year-old warehouse at 5101 Industrial Blvd. NE was Alltemp Distribution Co. The purchase allows Hyde and Mortenson to move to Phase VIII of the $125 million Northern Stacks development, which currently

Minnesota Real Estate Journal

includes six buildings on 122 acres, with a seventh under construction.

The Alltemp building was not part of the master plan in May 2014, when Hyde and Mortenson broke ground on Northern Stacks, a former Superfund site that sits on the east bank of the Mississippi River just south of a junction between two interstate highways.

The developers tried to make a play for the property when it hit the market a year ago, said Paul Hyde, founder and partner of Hyde Development. Leasing at Northern Stacks had been brisk, and demand showed no sign of abating.

The occupancy rate at Northern Stacks is currently 93 percent, and only two spaces are available – one in Stacks V totaling 62,591 square feet, and another in Stacks VI at 50,091 square feet.

Even so, the deal was very attractive, Hyde said. The price is above the property’s official assessment by Anoka County, which stood at $6.66 million for

taxes payable in 2019, but well below the initial asking price of $10.6 million, or $59 per square foot.

The seller was willing to go lower for the right buyer, in this case a local with a good reputation and a “wildly successful” business park across the street, said Chris Weirens, a broker with Cushman & Wakefield who represented Alltemp in the sale.

“When we set the asking price, we were seeing if we could find that ideal buyer out there who would come in and pay us that big number for it,” Weirens said. “Industrial buildings have been selling for crazy figures.”

In the end, it sold for about $38 per square foot. Prices for buildings of similar size, location and vintage sold during the last year ranged from $34 to $92 per square foot, according to recent CoStar data, with an average price per square foot of about $62.

Hyde said he and the seller were able

July 2018

to negotiate down to a very reasonable final price, given current market dynamics.

“At this stage of the cycle, most of the properties out there are beyond a price point that you can make work, especially for a third-party investor,” Hyde said.

“There’s a lot of competition, and we have seen some very high sales comps for buildings that need a lot of work.”

The Alltemp property is currently tenanted by Murphy Warehouse Co., which bought Alltemp’s business about five years ago, but not its real estate holdings. Murphy will move out of 5101 Industrial by the end of November, Hyde said. Work on the building will likely be done by early 2019.

HGA Acquires SEG Sustainable Engineering Group Acquisition Broadens HGA’s ExpertClosings to page 15

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Minnesota Real Estate Journal

July 2018

Blockchain's Potential Impact on the Commercial Real Estate Industry ers are excited by the potential of using blockchain technology to reduce financial infrastructure burdens by nearly 30 percent. That being said, here are some specific impacts blockchain can have upon commercial real estate.

By Kris Lindahl, CEO/Owner Kris Lindahl Real Estate

B

lockchain has quickly established itself as one of the hottest and most innovative technologies of the 21st century. Most commonly associated with cryptocurrency transaction methodology, blockchain has the potential to have a huge impact on business globally, including the commercial real estate industry.

What is Blockchain?

Essentially, blockchain permits the distribution of digital information using encryption technology across a peer based cloud network. It's literally an online public shared database that keeps a record of all transactions coming through the chain. This transforms the data sharing process from paper copies and electronic files to a secure digital ledger that is created and automatically updated with each transaction.

Blockchain is not controlled by a singular entity and its data is incorruptible and transparent.

While blockchain methods have bare-

Kris Lindahl ly scraped the surface of the commercial real estate realm, its use within the industry may increase considerably over the next few years. Just to indicate how strongly the business world is embracing this technology, surveys indicate that 80 percent of executives plan to integrate blockchain amid their business structure in the next three years. Furthermore, with an eye towards profits, own-

Blockchain In Commercial Real Estate Amid the growing digital world, some businesses have become more savvy in staying connected while maintaining greater accuracy, security and transparency concerning transactions by using blockchain technology.

Blockchain has the potential to help the commercial real estate industry address current issues in these areas in addition to helping increase efficiency through allowing faster, secure and cheaper transactions compared to traditional systems. The following are a few specific ways that blockchain could potentially promote improvements amid commercial real estate.

Real Time Data Analysis for Faster Transactions Using blockchain can help real estate agents facilitate commercial title and

lease records much faster than by using traditional paper-driven options.

Blockchain creates secure digital identities while providing real time data analysis that expedites transactions significantly. Furthermore, the integration of smart contracts can further automate the management of on-going property operations, lease agreements and cash flow.

This allows controlling entities to streamline transactions that enforce, facilitate and verify contracts without an intermediary service getting involved.

The connectivity of data, transactions and contracts between entities at the speed of light would benefit all of the parties in a commercial real estate transaction. Overall, these benefits equal cost savings and expedite multiple processes in commercial real estate while maintaining transparency. As an additional perk, the speed of blockchain transactions makes commercial real estate assets more liquid which is highly appealing to many investors.

The Impact of Blockchain on MLS Block Chain to page 18

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Minnesota Real Estate Journal

July 2018

Senior Housing From page 1

Senior housing is a big industry Nationally, senior housing is estimated to be a $250 billion to $270 billion industry. (There are 75 million baby boomers in the United States with 10,000 of them turning 65 every day).

Locally, “There’s a lot of inventory coming on the market to meet the future demands,” says Sharon Thole, director of Love Funding, one of the nation’s leading providers of FHA multifamily, affordable and healthcare financing.

“The biggest development has been of assisted-living facilities, memory care and independent living,” says Thole, a licensed nursing home administrator, who has worked as an operator in Minnesota and the Upper Midwest for the past 17 years. She joined Love Funding in April.

Thompson says the market needs more housing catering to active seniors.

“The greatest need is for buildings that cater to younger, more active seniors who don’t need the level of assistance found in assisted-living buildings,” he says. “Recent development has disproportionately been housing with services, which primarily caters to sen-

iors in the mid-80s and over. At the same time, the fastest-growing segment of the senior population is those in their 70s.”

More private equity, developers enter market Thole says private equity and developers have entered the market moving from multifamily development to senior housing to meet the demand and in hopes of “reaping some nice investment returns. They see there’s a demand and

want to be in front of it,” she says.

“I think there’s still some room in the market for more affordable senior housing to be built,” Thole points out. “Most of the inventory that has come on the market is market rate or luxury. I believe there are variances among baby boomers’ income levels, and there‘s a large portion that will fall into needing affordable housing when this all washes out.”

Thole also says investors and devel-

opment groups are relying on local operators to run the operations.

“The biggest challenge for the operators is to hold occupancy steady while the wave of seniors enter the market,” she says. Also challenging is “figuring out how to offer services that meet the meet baby boomers’ expectations at price points the baby boomers are willing to pay for.”

Senior Housing to page 12

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Minnesota Real Estate Journal

July 2018

Senior Housing from page 10

Thole says, “By 2030, when all the baby boomers reach 65, we will know if we have enough inventory to meet the demand.”

Are we heading in the right direction?

“I think we’re on track,” says Susan Farr, vice president of new business development for Ebenezer, the Twin Cities largest senior living operator.

Ebenezer, which is part of Fairview Health Services, has 90 owned and managed communities in operation or under construction, and more in the works.

“I’m working on stuff up to 2021 right now,” Farr says, pointing to new projects underway in Minnetonka and Chanhassen, among others.

Ebenezer partners with big developers including The Opus Group, Oppidan Investment Co. and United Properties as well as smaller developers to manage and operate their facilities.

Farr says “demand is just exploding,” however, Ebenezer is very selective in who they work with.

“We set the bar high,” she says. “It’s very different than developing a marketrate apartment building. Market rate is a real estate deal. Senior housing is an operator deal. It’s operator-driven.”

Ebenezer’s facilities provide the full

continuum of care including independent living, assisted living, memory care, transitional care, adult day programs, child care and intergenerational programs.

“Are we excited that this industry is booming? Absolutely we are,” Farr says.

“It’s exciting times.”

Oppidan recognizes demand Seeing the booming demand, Excelsior-based Oppidan is partnering with

Ebenezer Management Services on its senior housing projects.

“The sense is that the demand is really just beginning,” says Shannon Rusk, vice president of development at Oppidan. “They call it the ‘silver tsunami.’ It really starts in 2020, and statistically, if you look at all the trends and demographics, it continues to grow to 2050.

There’s really no end in sight.

“We’re not concerned about the demand being there,” she adds. “What

we’re concerned about is making sure we’re building in the right locations, not overbuilding, not building too close to where our competitors’ communities are, and that we’re understanding the specific demographics where we’re building and providing the right community with the right amenities and the right type of apartments and finishes.

That’s where we work closely with Senior Housing to next page

July 2018

Ebenezer. They know what works and what doesn’t work.”

Oppidan currently has two senior housing facilities under construction -in Mankato and Minneapolis. The Minneapolis development is the $85 million, 283-unit project called The Pillars of Prospect Park, which broke ground in July and will be completed in 2020. It’s located in the Prospect Park neighborhood of Minneapolis, near the University of Minnesota campus. It will feature underground parking, retail space and a child care center. The facility will be “intergenerational,” meaning it will foster interaction between older adults and kids. The daycare center will also help the University of Minnesota fill a gap in childcare shortages while employing students. (The university announced plans to close its childcare center).

“We came upon this opportunity, which in our mind was a perfect blend of not only being part of the University of Minnesota but we’re in Prospect Park, which is very residential,” Rusk says. “That’s where a lot of the professors and staff and medical professionals who work at the university live, and it turns out that there’s a very mature demographic in Prospect Park.”

Rusk says the proximity to the university offers opportunities for collaboration with university staff and students.

The site is also near the light rail transit

Minnesota Real Estate Journal

station to help draw employees from around the Twin Cities.

The facility will offer independentliving, assisted-living and memory-care options. Amenities will include a theater, fitness center, chapel, bistro, roof deck and golf simulator.

The Opus Group making its entrance into senior housing Leveraging its strong residential expertise, Opus is developing the 147unit senior living development in Minnetonka called the Orchards of Minnetonka, which will provide a full con-

tinuum of care including independent living, assisted living and memory care.

Opus is partnering with Ebenezer to manage the facility. Amenities will include a salon, chapel, club room, community room and memory care garden.

“We are pleased to expand our collaborative business model into senior living through this shared effort with Ebenezer,” said Matt Rauenhorst, vice president, Opus Development Co. L.L.C., in a prepared release. “The market demand coupled with our vision for this site and Ebenezer’s strong track record managing these properties is a recipe for suc-

Page 13

cess.”

The project is scheduled for completion in April 2019.

United Properties is developing senior co-ops, assisted-living communities Minneapolis-based United Properties is very active in the senior-living sector with Applewood Pointe senior co-op communities under construction in Eagan, Champlin and Maple Grove and move-ins occurring in Roseville. They facilities are managed by Ebenezer.

Senior Housing to page 18

Page 14

The Reserve From page 1

The Three Rivers Park District’s Elm Creek Park Reserve and the Central Park of Maple Grove. The project is also in close proximity to the Maple Grove transit station.

“We have also received incredibly positive early feedback from prospects and residents about our full-time staff.

Whether it’s our full-time property management, maintenance and leasing staff or our concierge team and groundskeeper, our people are also a significant differentiator,” adds Tennessen.

Minnesota Real Estate Journal

July 2018

July 2018

Minnesota Real Estate Journal

Closings from page 6

ise in Sustainable Energy Planning HGA has acquired the Sustainable Engineering Group (SEG) in Madison, Wisconsin, a leading engineering firm focused on energy optimization and sustainable design. The acquisition reinforces and broadens HGA’s existing expertise in energy and infrastructure planning and design for leading national clients in healthcare, academic, corporate, and public sectors.

“SEG’s approach and deep knowledge will allow us to better serve the energy needs of our growing client base,” said Rick Hombsch, PE, LEED AP, vice president and HGA’s Energy & Infrastructure market leader. “Their team brings technical insights into emerging energy technologies and renewable resources that build on our existing strengths in high-performance energy systems, commissioning, retrocommissioning, energy auditing, and

central energy plants. By combining forces, we are creating a more robust inhouse practice that will enhance our capabilities to research, plan, and implement highly advanced energy systems that benefit our clients economically and environmentally.”

Founded in 2004 by Manus McDevitt, PE, LEED AP, and Svein Morner, PE, PhD, LEED AP, Sustainable Engineering Group quickly established itself as a regional leader in energy systems modeling, commissioning, retro-commissioning, LEED certification, and advanced research, with specialized focus in geothermal systems, renewable energy systems, and carbon reduction/net zero campus planning.

McDevitt has more than 25 years of experience in energy-efficient HVAC design and engineering systems. Morner has comparable tenure in mechanical engineering, with a research focus in thermal storage systems, energy self-

sufficient buildings, fuel cell design, and solar panels.

SEG’s 12-person team works out of an historic commercial building that has achieved net zero energy using strategies that include waste heat recovery, natural ventilation, a photovoltaic roof system, and real-time energy-use monitoring.

“Clients are concerned about reducing their carbon footprint and exploring the most efficient designs for the life of their buildings,” said McDevitt. “HGA has a demonstrated track record as well as a clear sense of responsibility around designing healthy, energy-efficient buildings—which aligns with our mission. Joining HGA provides the opportunity for our team to work with a more diverse portfolio of clients and project types, to build our expertise in new technologies and research; it allows us to expand our scope to make an even more significant, positive impact on the built environment, which is our real passion.”

The SEG acquisition is part of HGA’s strategic focus on elevating its national excellence in sustainable design and

Page 15

energy planning. With the addition of Lisa Matthiessen as National Sustainable Design Director in 2017, HGA is building new structures and deepening its expertise to explore new directions in planning healthy buildings that help create a more profound impact for clients and end users.

The acquisition is effective July 1, 2018. SEG officially will change its name to HGA and merge operational and administrative functions.

Vikings Owner Proposes 17Story Tower for Downtown Minneapolis Strong Market Surrounding Stadium Could Lead to Multiple Projects on Land Owned by Wilf Family The family that owns the Minnesota Vikings is in motion to develop a collection of long-held properties that are clustered near the football team’s two-yearold, $1.1 billion stadium in downtown Minneapolis, beginning with a 17-story apartment tower.

Since 2005, the team has been conClosings Etc to page 16

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trolled by the Wilfs, a New Jersey family that made its fortune in home building, commercial and multifamily development on the East Coast.

The family is already in the midst of one large-scale development in the Twin Cities suburbs: Viking Lakes, which is an effort to build retail, office and 1,000 residential units on the 200 acres around the Vikings’ new corporate headquarters and practice facility in Eagan, MN. However, until now the Wilfs haven’t attempted to capitalize on the burgeoning market that has sprung up around the stadium in Minneapolis proper.

If successful, the new tower will rise on a parking lot at 240 Park Ave. But that could be just the start of an extended effort to build on Wilf-owned properties downtown, said Don Becker, who serves as both project executive with the Vikings and a principal at the Wilf’s development business, Garden Homes The 0.8-acre site at 240 Park is part of a package of lots purchased from Central Parking in 2007. The portfolio also includes about 1.1 acres at the northeast corner of Chicago Avenue and Fourth

Minnesota Real Estate Journal

Street, where a multilevel parking deck is now, and roughly 0.9 acres of vacant land immediately to the east, right before Third and Fourth Street briefly converge and dip under Interstate 35.

Back then, the company did not have a clear plan for the properties, Becker said, but thought they may be useful either to the stadium project itself or as development properties down the road.

At the time, downtown’s residential population was much lower – according to the Minneapolis Downtown Council, 11,552 people moved in from 2006 to 2017, bringing the total residential population from about 32,000 to 43,456, a 36.2-percent increase.

A hotspot in this residential renaissance has been the area north and east of the stadium, which has been in the midst of a building boom that shows little sign of abating. Until now, other developers like Minneapolis’ Ryan Companies, Alatus and the Sherman Group have been most active there, Becker said, but the Wilfs are ready to get in the game.

Right now, much of the plan for 240 Park is preliminary, and many aspects of

July 2018

the project are still to be determined.

Company executives still have yet to decide on the number and type of units, amenity mix or which segment of the rental market it will target.

7th Ave E in Alexandria, MN. Sunrise East was built in 1995 and features 13 two-bedroom units and 5 three-bedroom units, the property was 100% occupied at time of sale.

MARCUS & MILLICHAP ARRANGES THE SALE OF A 18-UNIT APARTMENT BUILDING

CBRE Capital Markets Completes Sale of 335,400 SF Distribution Center in Rogers, MN for $20.425M

Marcus & Millichap (NYSE: MMI), a leading commercial real estate investment services firm with offices throughout the United States and Canada, today announced the sale of Sunrise Apartments, a 18-unit apartment property located in Alexandria, MN, according to Jon Ruzicka, regional manager of the firm’s Minneapolis office. The asset sold for $895,000.

Chris Collins, investment specialists in Marcus & Millichap’s Minneapolis office, had the exclusive listing to market the property on behalf of the seller, a private investor. The buyer, a private investor, was secured and represented

by Chris Collins.

Sunrise Apartments is located at 1616

CBRE Capital Markets recently arranged the sale of the Wilfred Distribution Center, a 335,400-square-foot Class A industrial distribution facility, to an institutional buyer for $20,425,000.

The Wilfred Distribution Center, located 24 miles northwest of Minneapolis along Interstate 94, consists of a 335,400-square-foot facility and additional land for a 141,000-square-foot expansion of the existing building. The building is currently 100 percent leased.

Judd Welliver, Ryan Watts, Sonja Dusil and Tom Holtz in CBRE’s Minneapolis office represented the seller, Scannell Properties. The sale closed June 29, 2018.

Originally built in 1999 and renovated

July 2018

in 2008 and 2018, the state-of-the-art distribution center features 32’ clear height, 4.6 percent office finish, a modern sprinkler system, cross-docking and parking for 99 trailers.

Grandbridge Finances $4.5 Million Stand-Alone Restaurant Grandbridge Real Estate Capital recently closed a $4,500,000 first mortgage loan secured by a 9,000 square foot stand-alone restaurant building in Oakbrook Terrace, Illinois. This refinance transaction was originated by Minneapolis-based Vice President Tony Carlson.

Funding for the fixed rate loan was provided through one of Grandbridge’s life insurance correspondents and featured a 25-year term with a 25-year amortization. The interest rate was locked at application and the transaction closed in 60 days. In this rising interest rate environment, the rate lock at application allowed the borrower to mitigate interest rate risk while working towards closing the loan.

Minnesota Real Estate Journal

Dougherty Funding LLC closes $41.4 million loan for Second & Second Apartments The Minneapolis office of Dougherty Funding LLC has closed a $41,375,000 First Mortgage Construction/ Term Loan for Second & Second Apartments, a to-be-built mixed-use six-story building that will contain 158 apartment units and 22,716 square feet of retail space located in Minneapolis, Minnesota. The Property is located on a 0.98 acre site at the southeast corner of N. 2nd Ave and N. 2nd Street in the heart of the North Loop neighborhood. Dougherty Funding serves as lead lender and servicer for the loan arranged for borrower 128 2nd Street North, LLC.

Dougherty Mortgage LLC closes $12.2 million Fannie Mae loan for Essex Place Luxury Apartments Dougherty Mortgage’s Oak Brook, Illinois office recently closed a $12.2 million Fannie Mae loan for the refi-

nance of Essex Place Luxury Apartments, a 148-unit market rate multifamily apartment property located in Tampa, Florida. The 10-year term, 30-year amortization loan utilized Green Rewards and was arranged for borrower Essex Associates LLC.

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office recently closed a $2 million Fannie Mae loan for the refinance of Palmetto Place Apartments, a 52-unit market rate multifamily apartment property located in Orangeburg, South Carolina.

The 10-year term, 30-year amortization loan was arranged for borrower Palmetto Place Orangeburg LLC.

Dougherty Mortgage LLC closes $2 million Fannie Mae loan for Palmetto Place Apartments Dougherty Mortgage’s Minneapolis

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Page 18 Senior Housing from page 13

The developer is also building assisted-living communities, in partnership with Ebenezer, and recently opened Cherrywood Pointe projects in Minnetonka and Plymouth.

Dominium focuses on affordable senior housing “We’ve always had a presence in the affordable senior housing market, but we really saw demand coming and started doing new construction to address the need in 2013,” says Ron Mehl, vice president and project partner at Plymouth-based Dominium. “Between 2013 and today, we’ve built or are in the process of building over 2,000 units.”

Dominium has about a half-dozen affordable, independent senior communities that recently opened or are under construction with more planned. Mehl believes it’s going to be difficult to keep up with increasing demand.

“I think the need is going to outpace the production,” he says. “Thirty percent of people over age 65 in Minnesota live solely on social security. We’re in this affordable business for people making 60 percent of the area median income.

When you’ve got that percentage of people living solely on social security, we sleep well at night knowing our properties are going to be full and stay full with a waiting list. But we do have some concerns that it’s going to be hard to keep up with the number of baby

Minnesota Real Estate Journal

boomers that are crossing that 55 or 65 threshold.”

Generally, rents are in the range of $995 for a one-bedroom and $1,300 for two-bedroom. These will vary slightly from year to year as area median income for a particular area changes and utility allowances increase or decrease.

One of Dominium’s newest projects is the 194-unit Legends of Spring Lake Park. Amenities include a community room, craft and card rooms, salon, library, fitness room and theater.

Roers Cos. moves into the senior housing space Long Lake-based Roers Cos. is a private developer that’s moving into the senior housing sector with several projects in the works. The company raises its own equity, lining up financing from individual investors seeking to diversify.

It recently opened the 88-unit Havenwood Richfield managed by Avinity. It’s also developing the 97-unit Havenwood Minnetonka that will open in 2019 and just broke ground on a 134-unit project in Burnsville. Walker Methodist will manage these two facilities.

Roers’ facilities offer the full continuum of care, which includes independent living, assisted living and memory care, so people can age in place.

“We’ve traditionally been apartment guys and done some student housing, and we just saw the opportunity in senior housing,” says Kent Roers, company principal and partner.

The projects are highly amenitized.

For example, the Burnsville project will have a chef-run kitchen, café, salon, pub room, private dining patio and crafts room.

Next on the list is Buffalo this fall,

Block Chain from page 8

The majority of real estate transactions are processed through Multiple Listing Services (MLS). The blockchain has a potential to disrupt this currently vital aspect of the commercial real estate industry. For starters, the MLS system is prone to inaccuracies, is highly fragmented and features a good deal of restricted information, which can make it challenging for agents and investors to identify trends or make realistic comparisons. With blockchain technology, there is a digitized ledger that openly records and shares real time information straight from the source.

Greater Transaction Transparency Blockchain records will allow every property to be quickly accessed and can provide information about construction updates, current owners, maintenance costs and inspection records which would be available publicly. This would mean that buyers, sellers and investors would all have equal access to this information

July 2018

and Roers is looking at a project on the east side of the Twin Cities for next spring.

to create a level playing field, which eliminates common barriers that often result by fragmented or outdated information.

Enhanced Data Accessibility Blockchain has the potential to eliminate some of the common challenges faced by agents and investors amid commercial real estate. Because the blockchain is open to the public anyone can see the information, and no single entity has control over it.

Firms will no longer be challenged by having stacks of files or data on multiple computers. Additionally, it also removes the opportunity for counterfeit documents such as titles and deeds that are common amid fraud scams.

The future of blockchain seems unlimited, but it's future will impact different industries in different ways.

Of all industries, commercial real estate is ripe for the enhanced benefits that blockchain will have to offer.

Time will only tell how businesses adopt this technology.