Excelsior & Grand, an upscale development with apartments, restaurants and retail in St. Louis Park, has been sold at a record price for a suburban apartment project.

On Thursday, Dayton, Ohio-based Connor Group paid Told Development $97.5 million for 337 apartments and 64,000 square feet of first-floor retail at a bustling intersection near the border of the first-ring suburb and Minneapolis.

"The area has such a great vibe to it. It's young and it's hip," said Connor Group's senior partner Pat Rini. "It's the cool-kid neighborhood and we really look for that."

Told Development, which is based in Plymouth, developed and built Excelsior & Grand in 2004 and has run it since.

The Connor Group is a first-time buyer in the Twin Cities and Rini said this isn't likely to be its last purchase. After entering a new market, the company typically buys six to 10 properties over the following 24 to 36 months.

Abe Appert, the CBRE senior vice president who brokered the deal, said there were multiple bidders.

The sign on the parking ramp at the Excelsior and Grand development in 2006.

The sale is the first big one of the year in Twin Cities apartment real estate, where national investors helped generate record sales by value over the past couple years. Initially, buyers targeted luxury buildings in downtown Minneapolis, but in recent months they have been shifting their focus to the suburbs, where the price per unit isn't as high and rent prices still have room to grow.

Weidner Apartment Homes of Kirkland, Wash., in March last year paid $107 million for 222 Hennepin, a retail and apartment project that includes a Whole Foods store in downtown Minneapolis. That was a record for any apartment complex in the region.

In December, New York City-based Blackstone Group paid $77.7 million to South Carolina-based Greystar for the 500-unit Park Place Apartments in Plymouth. A couple other buildings, including the Walkway in Uptown, have fetched a higher per-unit price than both of those projects.

The Twin Cities has been, and is expected to continue to be, an attractive location for investors who are looking for better returns than they can get in markets that are overbuilt.

Last week, Marquette Advisors said the average vacancy rate in the 13-county metro was just 2.3 percent, unchanged from the previous quarter. Factoring in buildings still in lease-up phase, the average vacancy rate was still just 3 percent, compared with 2.7 percent during the previous quarter.

In downtown Minneapolis, for example, the average vacancy rate was 4.2 percent, down from 9.8 percent last year. And in Golden Valley, where a couple new buildings opened recently, the average vacancy rate spiked to 6.1 percent from 1.9 percent last year.

Mary Bujold, president of Maxfield Research, said that as a result of those fundamentals she expects to see strong demand to purchase rental properties as long as vacancies stay low and rents continue to rise, and there's even a possibility that 2016 could set another record.

Rini said the Connor Group now has properties with 13,500 units in 11 metro areas, led by Raleigh-Durham, N.C., Charlotte, N.C., and Atlanta. The company, which has about $1.2 billion in assets and 420 employees, focuses on existing apartments and manages everything in its portfolio. It will set up a local management office at Excelsior and Grand.

The company has yet to identify its next acquisition targets in the Twin Cities, but said that it hadn't decided to focus on a particular area.

"We are looking forward to being in the Minneapolis market," managing partner Larry Connor said. "This is a great way to start in our opinion, with a high-end community in a well-established area. We look forward to growing in this region."

Jim Buchta • 612-673-7376