MINNEAPOLIS-ST. PAUL INVESTMENT TRENDS

Transcription

1 FALL 20 MINNEAPOLIS-ST. PAUL INVESTMENT TRENDS Colliers Minneapolis - St. Paul Investment Services Group

2 The Minneapolis-St. Paul Investment Sector is Robust and Marked by Strong Demand, an Influx of Capital, Historic Sales Volumes and a Favorable Interest Rate Environment Investors are attracted to the Minneapolis- St. Paul market due to positive economic fundamentals including a highly educated workforce, diverse economy and strong corporate presence. With over 28,000 jobs added in the last 12 months, the wider metro area benefits from the headquarters of Fortune 500 companies as well as large local employers like the University of Minnesota. The local workforce ranks 11th in the country in terms of education with 41 percent achieving a bachelor s degree or higher and an average annual household income of $69,000, topping the national average by 29 percent. 10 Year Treasury 10 Year Treasury (%) Minneapolis-St. Paul: A globally competitive place to invest, do business, and live. 1st in job creation 2 nd in number of Fortune 500 company headquarters per capita 4 th in labor force 9 th in number of population Forbes largest private companies COLLIERS INTERNATIONAL 1

3 MINNEAPOLIS-ST. PAUL INVESTMENT TRENDS The market has seen an influx of new capital over the past few years due to cap rate compression occurring in coastal markets. Preferred office investment types include Minneapolis CBD properties, as potential buyers are pursuing investments in buildings that are attractive to potential employees. Features such as convenient locations, extensive amenities, and access to public transportation tend to be priorities. There will be growing demand from investors for Class B and suburban office properties, as the number of available Class A and CBD properties dwindle due to many of them changing hands recently. In the Minneapolis CBD office market, Franklin Street purchased Plaza Seven Office Tower from City Center Realty Partners and Angelo, Gordon & Co. for $82 million, or $251 per square foot, which makes it the largest commercial property transaction so far this year. This high-water mark for the year could be increased with the future sale of the IDS Center. Accesso Partners of Florida has the iconic 1.43 million-square-foot building for sale. Plaza Seven Office Tower Sampling of National Cap Rates 6.0%Seattle COMBINED OFFICE, RETAIL, AND INDUSTRIAL Minneapolis-St. Paul 7.3% 6.6% 5.6% San Francisco 6.7% 5.6% New York/ Northern New Jersey Chicago Denver 5.6% Los Angeles/Inland Empire Dallas Average cap rate over the past 4 quarters. Information provided by Real Capital Analytics. 7.0% Houston 7.0% Atlanta 7.1% Miami 5.9% COLLIERS INTERNATIONAL 2

4 Quarterly Volume/Price Per SF Minneapolis-St. Paul Office CAP Rate History - Minneapolis- St. Paul Combined Office, Retail, and Industrial Quarterly Volume/Price Per SF Minneapolis- St. Paul Retail Quarterly Volume/Price Per SF Minneapolis-St. Paul Industrial There has been a significant amount of office sale activity, especially among Class A properties over the last several years. We are seeing investors turn to Class B properties as a viable opportunity, especially those that are in an amenity-rich environment in prime locations. Park Place In the industrial market, there is low supply and strong demand across the board both for owneruser buildings and investment properties, especially for users seeking buildings of 100,000 square feet or more. There is a limited number of assets available for sale in the retail market; investors favor prime properties in core urban or first-ring suburban locations. During the 4th Quarter of 20, Park Place East & West, a Class B property located in close proximity to the West End in St. Louis Park, sold for $7 per square foot. COLLIERS INTERNATIONAL 3

5 MINNEAPOLIS-ST. PAUL INVESTMENT TRENDS CAP Rate History Minneapolis-St. Paul Apartment Quarterly Volume/Price Per Unit Minneapolis-St. Paul Apartment In the local multifamily market, interest in large value-add investments has soared and cap rates have compressed noticeably on these deals as investors chase the limited pipeline of available properties. Despite continued supply limitations, the multifamily investment market is on-track for a record level of transaction volume and will easily eclipse the $1 billion market, the high-water mark set in 20. Sampling of National Apartment Cap Rates 5.1%Seattle Minneapolis-St. Paul 5.2% 6.1% 4.5% San Francisco 5.9% 4.7% New York/ Northern New Jersey Chicago Denver 4.7% Los Angeles/Inland Empire Dallas Average Apartment cap rate over the past 4 quarters. Information provided by Real Capital Analytics. 6.4% Houston 6.6% Atlanta 6.3% Miami 5.1% COLLIERS INTERNATIONAL 4

6 Industrial Sale Transactions PROPERTY NAME ADDRESS CITY BUYER SELLER SF PRICE PRICE/PSF DATE BAE Building 4800 E River Rd Fridley Gramercy Property Trust Hyde Development JV Mortenson Development 585,200 $46,800,000 $80 FedEx Corp Rogers Dr Rogers Realty Income Corp Scannell 313,000 $44,541,705 $142 Berkshire Corporate Center 2300 Berkshire Ln N Plymouth Felton Inc 5500 Feltl Rd 5500 Feltl Rd Hopkins Carter Validus Mission Critical REIT II Opportunity Advisors JV Argosy Real Estate 245,091 $23,200,000 $95 Liberty Property Trust 135,000 $19,900,000 $ SE Elm St 2222 SE Elm St Minneapolis University of Minnesota Murphy Warehouse Co 642,114 $17,950,000 $ Park Ct 435 Park Ct Circle Pines Powers Place 8100 Powers Blvd Chanhassen Evergreen Boulevard 8840 Evergreen Blvd Coon Rapids Biynah Industrial Partners JCC 8100 Powers Boulevard LLC Shopoff Trust JV Guggenheim RE Coon Rapids LLC Sentinel Real Estate 265,5 $,050,000 $60 United 140,800 $14,200,000 $101 Fairbridge 261,805 $14,000,000 $53 fmr Genmab 9450 Winnetka Ave N Brooklyn Park Takeda Pharmaceutical Baxter Healthcare Corp 2,000 $12,798,800 $60 Silgan Containers Distr 1080 Park Pl Shakopee United Breckner River Dev 299,600 $12,750,000 $ Willow Dr 4535 Willow Dr Medina Graphic Packaging Inc Walter G Anderson Inc 219,451 $12,000,000 $55 Eden Woods Business Center Valley View Rd Eden Prairie Alidade Cap Onward Investors 6,736 $11,712,125 $ Innovation Blvd 5651 Innovation Blvd Shakopee Liberty Property Trust The Opus Group 197,956 $11,013,680 $ SE University Ave 2929 SE University Ave Minneapolis Harlem Irving Cos David W Barnhart & Meredith V Barnhart 90,6 $10,710,400 $ Business Center IV 9310 Winnetka Ave N Brooklyn Park Lone Star Funds IRET 78,190 $10,200,000 $ W 78th St 4900 W 78th St Bloomington Phillip Jaffe Interstate Partners 111,046 $9,425,000 $85 Cedar Business Center future Costco Broadway Business Center III IV VI & VII American Blvd E 3311 Broadway St NE Bloomington Alidade Cap Onward Investors 119,295 $8,496,310 $71 Minneapolis Costco John J Ledy 180,000 $8,300,000 $ Taft St NE Minneapolis Interstate Partners CORE Realty Holdings 4,481 $7,800,000 $50 Sportech th Cir Elk River Meritex Enterprises Sportech 105,000 $7,777,000 $74 Mendota Heights Business Center 2520 Pilot Knob Rd Mendota Heights The Dakota REIT JV Janet M Redington Wyatt The Pudel Pointer MH LLC 71,939 $7,500,000 $104 Crosstown North 7500 Setzler Pkwy N Brooklyn Park Stein Industries Artis REIT 120,000 $7,380,000 $62 Forterra Pipe & Precast th St NW Elk River WP Carey REIT 1065 Phalen Blvd 1065 Phalen Blvd Neptune Industrial USA Inc Forterra Pipe & Precast 7070 Cretex Ave E Shakopee WP Carey REIT River Road Business Center III & IV 5201 E River Rd Fridley MLG Capital JV Forum Equities LLC Forterra Building Products 81,329 $7,173,024 $88 St Paul Port Authority 58,000 $7,000,000 $121 Forterra Building Products CBRE Global Investors OBO First Industrial JV CalSTRS 43,385 $6,683,027 $4 119,292 $6,483,333 $ th Ave N th Ave N Golden Valley Lubrication Technologies Bellcourt Technologies 132,400 $6,450,000 $49 Q3 Q3 Q3 Q3 Q1 Q3 Q1 Q1 Q1 Q1 COLLIERS INTERNATIONAL 5

7 Office Sale Transactions PROPERTY NAME ADDRESS CITY BUYER SELLER SF PRICE PRICE/PSF DATE Plaza Seven Office Tower (Office Condo) 45 S 7th St Minneapolis RSM Plaza 801 Nicollet Mall Minneapolis Lawson Commons 380 Saint Peter St North Be the Match HQ 524 5th St N Minneapolis Franklin Street Golub & Co JV Oaktree Angelo Gordon JV CCRP United $82,000,000 $ ,796 $78,350,000 $188 4,824 Frauenshuh Cos TIER REIT $68,400,000 $7 436,478 Q1 Transwestern OBO State Farm Insurance United $68,2,185 $ ,000 Canadian Pacific Plaza 120 S 6th St Minneapolis Artis REIT Ladder Capital $63,044,750 $0 393,902 Park Place East & West Southdale Office Centre Northland Plaza Ecolab Global Headquarters Wells Fargo Plaza Wayzata Blvd France Ave S 3800 American Blvd W 385 N Washington St 7900 Xerxes Ave S St. Louis Park Edina Minneapolis Bloomington ASA / Middleton Partners Wildamere Sterling Real Estate Trust JV Bell State B&T Ecolab DRA Advisors JV CCRP First National Bank Building 332 Minnesota St Madison Equities Golub & Co JV AEW Capital Partners GE Capital Real Estate $60,9,667 $7 387,000 $55,000,000 $ ,041 Q1 MetLife $52,500,000 $ ,000 Q3 Travelers Insurance $47,000,000 $97 484,500 Q3 Invesco RE $46,250,000 $ ,746 Nightingale $37,250,000 $56 662,845 Golden Hills Office Center 701 Xenia Minneapolis Lone Star Funds IRET $36,300,000 $ ,758 Q3 605 Waterford Park 605 Highway 9 N Plymouth DRA Advisors Artis REIT $31,500,883 $2 207,598 Colonial Warehouse 212 3rd Ave N Minneapolis Excelsior Group T Denny Sanford $30,000,000 $ ,000 Mendota Office Center I & II 1250 & 1270 Northland Dr American Corporate Center I & II 1285 & 1295 Northland Dr 7500 Flying Cloud Drive Valley Creek Office Park River Park Plaza Shoreview Corporate Center Northland Dr 7500 Flying Cloud Dr 8301 Golden Valley Rd 10 River Park Plaza 4000 Lexington Ave Eden Prairie Golden Valley Grandview Square 5201 Eden Ave Edina future Minnesota Vikings Campus 4001 Lexington Ave N 2700 Lone Oak Pkwy 4001 Lexington Ave N Unity Professional Building 500 Osborne Rd Fridley Crosstown Center Crosstown Cir MSP Real Estate Inc Excelsior Group Senior Housing Trust Cohen Equities Eagle Ridge Partners JV CarVal Capital Partners (MN) Minnesota Vikings JV Garden Commercial JV M Land LLC JV Eagan V Land LLC Land O' Lakes Inc Healthcare Realty Trust IRET JV United Cornerstone RE Advisers $26,524,400 $89 298,0 Q3 $26,040,000 $ ,780 Frauenshuh Cos $22,700,000 $ ,185 Q1 LNR Partners OBO GCCF 2005-GG5 LNR Partners OBO JPMCC 2006-LDP7 $21,105,001 $64 328,600 Q3 $21,000,000 $38 550,000 Q3 Opus $19,000,000 $197 96,248 Excelsior Group $18,660,000 $34 550,000 Q1 Arden Hills Associates LP Wallingford Co JV Bernardi Family LP $18,000,000 $62 288,854 Q3 $,040,000 $245 65,518 Eden Prairie Lone Star Funds IRET $,000,000 $86 185,000 Q3 COLLIERS INTERNATIONAL 6

8 Retail Sale Transactions PROPERTY NAME ADDRESS CITY BUYER SELLER SF PRICE PRICE/PSF DATE Southdale 494 Shopping Center White Bear Marketplace Chanhassen West Village Center 4200 W 78th St Minneapolis Menards 3201 White Bear Ave White Bear Lake 800 W 78th St Chanhassen Normandale Village 59 W 98th St Minneapolis Mills Fleet Farm 1001 Industrial St Hudson Plymouth Plaza Heritage Commons Shopping Center Phase 3 The Grove The Grove Andover Station 14 County Rd 101 Plymouth Heritage Dr Lakeville 9875 Maple Grove Pkwy 9875 Maple Grove Pkwy Bunker Lake Blvd Menard Incorporated Glenborough JV Oaktree JV Strategic Realty Trust Phillips Edison & Co STORE Capital (REIT) Rick Pietrusa Epic Real Estate Partners Welsh Companies Oppidan Investment Co 136,0 $43,000,000 $3 Q3 118,627 $30,067,721 $253 Q1 IRET 137,572 $29,200,000 $212 Q3 MLG Capital 140,400 $19,950,000 $142 KKR 187,876 $,980,171 $90 Q1 Globe University and Minnesota School of Business Sentinel Management Co 71,209 $12,300,000 $173 Q1 138,690 $12,090,000 $87 Q3 Maple Grove Hempel Ryan Companies 62,000 $11,982,678 $193 Q1 Osseo Hempel Ryan Companies 62,000 $11,982,678 $193 Andover Lifetime Fitness 675 Commons Dr Delano Crossings Becker Furniture World Home Center At Home 1350 Town Centre Dr West Lake Plaza Valley Ridge Shopping Center Walgreens 1901 American Blvd W Shorewood Village Shopping Center Shorewood Village Shopping Center Elm Creek Plaza Cedar Point Commons Cedar Point Commons 1380 Babcock Blvd Delano 130 1st St Becker Burnhaven Dr 1350 Town Centre Dr Sw 12th St Frontage Rd W Lyndale Ave S 1901 American Blvd W State Hwy State Hwy Elm Creek Blvd N Burnsville HJ Development Life Time Fitness Inc HJ Development STORE Capital (REIT) AVG Partners United The Sherman Group United Becker Furniture World Continental Dev Corp 74,854 $10,650,000 $142 73,050 $10,600,000 $145 Q3 76,577 $10,000,000 $ ,000 $10,000,000 $38 Q3 107,400 $9,990,000 $93 Eagan VEREIT Charles Grobe 97,097 $9,176,000 $95 Q1 Forest Lake Glenborough JV Oaktree JV Strategic Realty Trust IRET 107,406 $8,824,421 $82 Q3 Stillwater TML Associates Kriss Novak 83,149 $8,631,800 $104 Q1 Minneapolis Rice Investment Partnership LLLP Capital Real Estate 14,000 $8,275,000 $591 Q3 Bloomington Stuart Companies David Knoblauch 74,148 $8,000,000 $108 Q1 Excelsior Excelsior Kraus-Anderson Kraus-Anderson Shorewood Village Shopping Center LLC Shorewood Village Shopping Center LLC 62,061 $7,996,500 $129 62,061 $7,996,500 $129 Q3 Osseo Crow Holdings OneCorp 11,612 $7,500,000 $ E 66th St Richfield Hempel Ryan Companies 32,000 $7,259,3 $227 Q E 66th St Minneapolis Hempel Ryan Companies 32,000 $7,259,3 $227 COLLIERS INTERNATIONAL 7

9 Apartment Sale Transactions BUILDING CITY SIZE (UNITS) YEAR BUILT BUYER SELLER SALE PRICE PRICE PER UNIT Fountain Place Eden Prairie Excelsior & Grand Saint Louis Park New York Life Real Estate Investors TIAA $79,800,000 $2, The Connor Group TOLD Development Co. $76,799,885 $227,892 Hampshire Hill Bloomington Investcorp Group Redwood Capital Group, LLC $68,050,000 $127,434 Burlington Abacus Capital Group LLC TH Real Estate $64,000,000 $149,883 The Covington Bloomington Weidner Apartment Homes Dunbar Development Corporation $48,550,000 $194,200 Metro Park East Minneapolis DRA Advisors, LLC Fountain Residential Partners $47,500,000 $244,845 The Addison Shakopee White Oak Partners The Praedium Group $47,500,000 $3,793 Southwind Village Burnsville Investcorp Group Virtu Investments $45,311,000 $141,597 Royal Oaks of Eagan Eagan Timberland Partners TIAA $34,950,000 $1,299 Cinnamon Ridge Apartments Eagan Darcom Construction, Inc. LivCor, LLC $33,950,000 $128,598 The Paragon Bloomington The Meadows of Coon Rapids Colonial Village Apartments Coon Rapids Fowler Property Acquisitions, LLC Monarch Investment and Management Group Eagan Abacus Capital Group LLC Sentinel Management Company, LLC $20,750,000 $96,065 Sherman Associates, Inc. $18,750,000 $126,689 Sentinel Management Company, LLC $18,300,000 $97,340 Aspen Glen New Brighton Related Midwest, LLC Metroplex, Inc. $,750,000 $91,570 Century North Apartments Oakdale Vitus Group StuartCo $14,725,000 $83,192 Oak Glen of Edina Edina Related Midwest, LLC Metroplex, Inc. Coze Flats Minneapolis Johnson Brothers Liquor Company $10,001,471 $6,273 Solhem Companies $9,400,000 $195,833 Como By The Lake Aeon 900 Como Lake Lp $8,850,000 $89,394 Cottage Terrace Preferred Management R.W. Johnson $7,900,000 $62,698 Golden Star Apartments Aeon North Lake Property Management $7,880,935 $72,302 The Meadowlands Shoreview The Related Companies Metroplex, Inc. $7,500,000 $170,455 Cottage Villas of Arden Hills Arden Hills Homel Realty Park Place LLC $7,000,000 $1,667 Lowry Grove Minneapolis Continental Property Group Lowry Grove Partnership, LLP $6,000,000 $50,000 Skywood Apartments Columbia Heights QT Rentals Alexander A. Levitan $5,450,000 $74,658 Century Commons MBJ Development Corporation Steven Scott Management $5,175,000 $132,692 Minnehaha Apartments David Nigh At Home Apartments $5,100,000 $85,000 The President Studios Minneapolis Maven Real Estate Partners Kashi Associates LLC $4,100,000 $85, Douglas Golden Valley 1959 Domicile MSP Anderson Kathleen & Kenneth $4,000,000 $68,966 Golden Valley Arms Apartments Golden Valley Hornig Companies, Inc. Mildred S Hanson, MD $4,000,000 $78,431 West Virginian Richfield Dean M Akins Keith Backhuas $3,900,000 $82,979 Lily Lake Terrace Apartments Stillwater METIS Greeley Associates Llc $3,520,000 $78,222 Laurel Curve Apartments Minneapolis Maven Real Estate Partners Persaud $3,350,000 $32,843 COLLIERS INTERNATIONAL 8

10 554 offices in 66 countries on 6 continents United States: 3 Canada: 34 Latin America: 24 Asia Pacific: 231 EMEA: 112 $2.5 billion in annual revenue BROKERAGE SERVICES CONTACT: William M. Wardwell SIOR Executive Vice President Brokerage Minneapolis-St. Paul bill.wardwell@colliers.com FOR MORE INFORMATION: Maura Carland Director of Research Minneapolis-St. Paul maura.carland@colliers.com Colliers International Minneapolis-St. Paul 4350 Baker Road, Suite 400 Minnetonka, MN billion square feet under management,000 professionals and staff Copyright 20 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.