In last week’s Notebook, we predicted that multifamily property sales in the Twin Cities metro are likely to eclipse last year’s record for total sales volume and that many of those deals are by well-funded national investment firms.
Aeon, a Twin Cities nonprofit organization, has also been an active and successful bidder. It recently paid $10 million for a pair of apartment buildings that will maintain much-needed workforce housing in the suburbs.
The first, Goldenstar, is a 109-unit building at 321 Larpenteur Av. E. in Maplewood that was built in 1966. The other, called Sun Place, is a 30-unit structure built in 1971 at 1721 Marion St. in Roseville. The properties were 100 percent occupied at the time of sale. Both are centrally located in the sought-after Roseville school district and have easy access to public transportation and several major employers, including Medtronic, the University of Minnesota and 3M.
Aeon bought the properties in partnership with the Housing Partnership Equity Trust. They had funding support from Ramsey County, the Housing and Redevelopment Authority and a mortgage from Citibank.
The purchases come at a time of considerable competition among buyers, especially when it comes to Class B and C suburban properties that are in need of refreshing to help support higher rents. According to a news release, Aeon will preserve the combined 139 apartment units at rents that are more affordable than current market rents.
Berkadia, a joint venture between Berkshire Hathaway and Leucadia National Corporation, brokered the deal. Senior director David Gaines said the properties had been shopped by a national pool of buyers and that there were 80 registered bidders and 13 qualified offers.
“We are seeing a trend of yield-seeking investors moving farther from the metro core in order to acquire properties like these that meet their target returns,” Gaines said.
Aeon is one of the biggest nonprofit housing owners, developers and managers in the Twin Cities. It owns and/or manages 40 properties throughout the metro area.
Aeon was in the news earlier this week after it and co-plaintiff Antonia Alvarez filed a lawsuit in Hennepin County District Court on behalf of the residents of Lowry Grove manufactured home park, aiming to stop its sale to another developer. The suit says the sale violated a Minnesota statute that’s intended to give residents the right of first refusal in such situations.