Investors targeted new apartments in 2018.

 
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Byline: Matt M. Johnson

Investors buying into the Twin Cities apartment market in 2018 were split on buying old and new.

Prominent in the market this past year were investors snapping up new apartment buildings, some by the portfolio full. The trend saw these investors, also known as "core" investors, ramping up their purchases the Twin Cities market, said Ted Abramson, a senior vice president with the Minneapolis office of CBRE.

CBRE's multifamily team sold a number of newer buildings, including the Variant and Solhavn apartments in Minneapolis' North Loop neighborhood, and had total 2018 sales of about $1 billion.

"What was different than in 2017 was the number core trades, whether suburban or urban," Abramson said in an interview. "It seemed like core capital came back to the market place."

More than a dozen newer buildings in the North Loop sold during the year, including a trio of buildings developed by Solhem Cos. and TE Miller, Soltva, Nolo Flats and Solhavn, which sold in October for a combined total of $89 million to LaSalle Investment Management.

Also drawing investors were student apartments near the University of Minnesota and a few newer suburban buildings. Investors from outside the Twin Cities paid about $200 million for three student housing complexes near the school during the summer and fall.

"There has been more buyer appetite among out-of-town buyers," said Matt Mullins, vice president of Golden Valley-based Maxfield Research, in a recent interview.

Total Twin Cities apartment sales should total between $1.8 billion and $2 billion, Abramson said.

But sales of Class B and Class C "value-add" properties were still relatively brisk, Abramson said. Those types of buildings made up the largest Twin Cities apartment portfolio sale of the year, a set of dozens of individual deals in which Twin Cities-based BT&A Construction sold off about $250 million in apartments.

Concierge

Address: 7600 Penn Ave. S., Richfield

Purchase price: $95.1 million

Units: 698

Price per unit: $136,246

Date of sale: Oct. 12

Buyer: JRK Property Holdings

Seller: MLG Capital LLC, Soderberg Apartment Specialists

Description: MLG Capital LLC and Soderberg Apartment Specialists more than doubled their initial $41 million investment in the Concierge apartments they purchased and began remodeling three years ago. The partners put $13 million into an amenity-heavy renovation the 50-year-old apartments, formerly known as Crossroads at Penn.

The renovation proved...

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