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ARDEN COURT APARTMENTSNEW BRIGHTON, MINNESOTA
Offering Memorandum
www.MFInvestmentBrokerage.com
For More Information on This Investment Opportunity
Please Contact Dan Linnell:
Mox GundersonAssociate Vice President of InvestmentsDirector National Multi Housing Group
952-852-9713Mox.Gunderson@MarcusMillichap.com
License #: 40237387
Dan LinnellVice President of Investments
Director National Multi Housing Group952-852-9770
Dan.Linnell@MarcusMillichap.comLicense #: 40211216
Josh TalbergSenior Associate
Member National Multi Housing Group952-852-9769
Josh.Talberg@MarcusMillichap.comLicense #: 40124349
G U N D E R S O N L I N N E L L T A L B E R G
exclusively listed by
PROPERTY NAME
MARKETING TEAM
ARDEN COURT APARTMENTS
EXECUTIVE SUMMARYOFFERING PROCEDURE
3
Gunderson Linnell Talberg of Marcus & Millichap is pleased to offer for sale Arden Court Apartments in New Brighton, Minnesota. This
apartment community is comprised of three apartment buildings totaling 69-units.
Price: $5,416,500
Interest Offered:
Fee simple interest in Arden Court Apartments, a 69-unit apartment community located at 346 Cleveland Avenue SW in New Brighton
(Saint Paul), Minnesota.
Offering Procedures:
Purchasers wishing to make an offer should submit:
• Letter of Intent (template available upon request)
• Proof of Funds and Banking References
• Resume (which includes a list of other investment real estate owned now or in the past)
At the time the Owners select a Purchaser, they will have considered a number of factors including: price, contingency time frame(s), track
record and the perceived ability of potential purchasers to complete the contemplated transaction. Therefore, interested purchasers are
encouraged to submit as much of the above as possible with the Letter of Intent.
All communication, inquiries and requests, including property tours, should be addressed to the Marcus & Millichap listing agents. Do not
directly contact the Owners or anyone at the property.
Tour Schedule:
• Thursday, September 29th
• Tuesday, October 4th
• Thursday, October 6th
• Tuesday, October 11th
• Thursday, October 13th
• Tuesday, October 18th
Call for Offers: Thursday, October 20th
N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E
Confidentiality and DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to
be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other
person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to
provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of
interest in the subject property. The information contained herein is not a substitute for a thorough due diligence
investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with
respect to the income or expenses for the subject property, the future projected financial performance of the
property, the size and square footage of the property and improvements, the presence or absence of contaminating
substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the
improvements thereon, or the financial condition or business prospects of any tenant, or any tenant's plans or
intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure
has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not
verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding
these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the
information provided. All potential buyers must take appropriate measures to verify all of the information set forth
herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2016
Marcus & Millichap. All rights reserved.
Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in
this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply
affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or
subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for
the purpose of providing tenant lessee information about this listing to prospective customers.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.
PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.
ARDEN COURT APARTMENTS
New Brighton, MN
ACT ID X0510344
TABLE OF CONTENTS
SECTION
INVESTMENT OVERVIEW 01Offering Summary
Regional Map
Local Map
Aerial Photo
FINANCIAL ANALYSIS 02Rent Roll Summary
Rent Roll Detail
Operating Statement
Notes
Pricing Detail
Acquisition Financing
Growth Rate Projections
Cash Flow
MARKET COMPARABLES 03Comparables
Rent Comparables
MARKET OVERVIEW 04Market Analysis
Demographic Analysis
ARDEN COURT APARTMENTS
ARDEN COURT APARTMENTS
6
INVESTMENT
OVERVIEW
ARDEN COURT APARTMENTS
#
EXECUTIVE SUMMARY
OFFERING SUMMARY
MAJOR EMPLOYERS
EMPLOYER # OF EMPLOYEES
3M 18,231
Honeywell 8,000
Medtronic 5,163
Minnesota Dept Transportation 4,800
UPS 3,510
Smiths Medical MD Inc 2,580
Medtronic Usa Inc 2,500
Medtronic World Headquarters 2,500
Cummins Power Generation Inc 2,303
AViands LLC 1,900
Ebersen Inc 1,500
Target 1,470
DEMOGRAPHICS
1-Miles 3-Miles 5-Miles
2015 Estimate Pop 6,670 78,349 229,075
2010 Census Pop 6,458 75,079 219,776
2015 Estimate HH 2,806 33,049 96,489
2010 Census HH 2,698 31,448 92,058
Median HH Income $61,853 $62,266 $56,539
Per Capita Income $34,819 $36,501 $32,724
Average HH Income $81,916 $84,680 $76,615
UNIT MIX
NUMBEROF UNITS
UNIT TYPEAPPROX.SQUARE FEET
37 1 Bedroom 640
29 2 Bedroom 882
3 3 Bedroom 1,024
69 Total 52,330
VITAL DATA
Price $5,416,500 CURRENT YEAR 1
Down Payment 20% / $1,083,300 CAP Rate 5.41% 6.61%
Loan Amount $4,333,200 GRM 8.05 7.19
Loan Type Conventional Net Operating Income $292,865 $357,914
Interest Rate / Amortization 4.00% / 30 Years Net Cash Flow After Debt Svc 4.12% / $44,617 10.12% / $109,665
Price/Unit $78,500 Total Return 11.16% / $120,926 17.45% / $189,084
Price/SF $103.51
Number of Units 69
Rentable Square Feet 52,330
Number of Buildings 3
Number of Stories 3
Year Built 1964
Lot Size 3.19 acre(s)
7
ARDEN COURT APARTMENTS
#
OFFERING SUMMARY
Immediate Value Add Opportunity
Current Loss-to-Lease over 9 Percent
Additional Rent Premiums Through Strategic In-Unit and Common Area Upgrades
Priced Well Below Replacement Value
INVESTMENT HIGHLIGHTS
Arden Court Apartments is a 69-unit extremely well-kept apartment complex located in New Brighton, Minnesota. In fact, it has been owned, managed and
visited every single week by the same hands-on owners for over 40 years. To say that it has been well cared for is an understatement.
Arden Court has seen significant capital investments throughout the years. Most recently they have replaced all of the original patio/balcony doors with
brand new Anderson sliding glass doors. Nearly all of the doors have been converted (they have supplies to complete the remaining). The windows have
all been replaced in the last 20 years. The boilers are all brand new. The pool pump system is brand new. The roofs have been maintained.
New ownership will step in, build a beautiful website for the property, update signage, clean landscaping and begin immediately raising rents to market as
well as charging garage rent. Over the course of the next 1-2 years rents will be brought to market, boosting the Net Operating Income (NOI) to over
$350,000 per year; with further upside through upgrades to select units and common areas.
Arden Court Apartments is only 12 minutes from downtown Minneapolis, 5 blocks from Lake Johanna and enjoys nearby residential single family home
sales in excess of $500,000.
Arden Court Apartments offers the rare opportunity to acquire a stabilized, well-kept apartment community at below replacement cost in the heart of one
of the strongest apartment markets in the entire nation.
INVESTMENT OVERVIEW
8
ARDEN COURT APARTMENTS
#
OFFERING SUMMARY
PROPERTY OVERVIEW
Arden Court Apartments, located in New Brighton, Minnesota, consist of three main apartment
buildings built in 1965 and two enclosed garage buildings totaling 77 stalls. The apartment
buildings feature 37 one-bedroom units, 29 two-bedroom units and 3 three-bedroom units.
Arden Court Apartments originally had 70 apartment units, however, one unit has been converted
to a rental/management office and was remodeled in 2015.
Tenants at Arden Court Apartments enjoy the property campus which spans over 3 acres. The
buildings are centered around the outdoor pool and courtyard. The fenced in pool features a new
pump and heater system. Views of the pool can be enjoyed through the brand new Anderson
sliding glass doors. Lake Johanna is just 5 short blocks from Arden Court Apartments.
Arden Court is easily accessible via Interstate 35W and is approximately 12 minutes to downtown
Minneapolis. Next year the property will be insulated from I35W road noise via a brand new
sound barrier being constructed along the interstate.
9
Laundry Facilities on Each Floor
Common Area Amenities
Controlled Access Entry
Outdoor Swimming Pool | BBQ Grill Area
Garages Available
1-, 2-, and 3-Bedroom Apartment Homes
Unit Amenities
Large Balconies or Patios
New Sliding Glass Patio/Balcony Doors
ARDEN COURT APARTMENTS
#
PROPERTY SUMMARY
OFFERING SUMMARY
PROPOSED FINANCING
First Trust Deed
Loan Amount $4,333,200
Loan Type Proposed New
Interest Rate 4.00%
Amortization 30 Years
Loan Term 10 Years
Loan to Value 80%
Debt Coverage Ratio 1.18
THE OFFERING
Property Arden Court Apartments
Price $5,416,500
Property Address 346 Cleveland Ave SW,New Brighton,MN
Assessor’s Parcel Number 32-30-23-14-0003
Zoning Multifamily
SITE DESCRIPTION
Number of Units 69
Number of Buildings 3
Number of Stories 3
Year Built/Renovated 1965
Rentable Square Feet 52,330
Lot Size 3.18 Acres
Type of Ownership Fee Simple Interest
Parking 77 Garages: 39 Stalls & 38 Stalls | Off Street | Surface Lot
Landscaping Mature
Topography Level
UTILITIES
Water Owner
Phone Tenant
CONSTRUCTION
Foundation Concrete
Framing Wood
Exterior Brick
Parking Surface Asphalt
Roof Flat
MECHANICAL
HVAC New Boilers | New Boiler and Pump for Pool
Wiring Standard
10
ARDEN COURT APARTMENTS
#
PROPERTY PHOTOS
PROPERTY SUMMARY
11
New Anderson Sliding Glass Doors in 90% of Units Refinished Cabinetry in Many Units
ARDEN COURT APARTMENTS
#
PROPERTY PHOTOS
PROPERTY SUMMARY
12
Newly Updated Management Office (2015)
South Garage: 39 Stalls | North Garage: 38 Stalls
REGIONAL MAP
ARDEN COURT APARTMENTS
13
LOCAL MAP
ARDEN COURT APARTMENTS
14
AERIAL PHOTO
ARDEN COURT APARTMENTS
15
ARDEN COURT APARTMENTS
16
FINANCIAL
ANALYSIS
FINANCIAL ANALYSIS
ARDEN COURT APARTMENTS
RENT ROLL SUMMARY
17
FINANCIAL ANALYSIS
ARDEN COURT APARTMENTS
18
RENT ROLL DETAIL
FINANCIAL ANALYSIS
ARDEN COURT APARTMENTS
19
RENT ROLL DETAIL
FINANCIAL ANALYSIS
ARDEN COURT APARTMENTS
20
RENT ROLL DETAIL
FINANCIAL ANALYSIS
ARDEN COURT APARTMENTS
OPERATING STATEMENT
21
FINANCIAL ANALYSIS
ARDEN COURT APARTMENTS
NOTES
22
FINANCIAL ANALYSIS
ARDEN COURT APARTMENTS
PRICING DETAIL
23
MARCUS & MILLICHAP CAPITAL CORPORATION
CAPABILITIES
MMCC—our fully integrated, dedicated financing arm—is committed to
providing superior capital market expertise, precisely managed execution, and
unparalleled access to capital sources providing the most competitive rates and
terms.
We leverage our prominent capital market relationships with commercial banks,
life insurance companies, CMBS, private and public debt/equity funds, Fannie
Mae, Freddie Mac and HUD to provide our clients with the greatest range of
financing options.
Our dedicated, knowledgeable experts understand the challenges of financing
and work tirelessly to resolve all potential issues to the benefit of our clients.
National platform
operating
within the firm’s
brokerage
offices
$4.9 billion
total national
volume in 2015
Access to
more capital
sources than
any other firm
in the industry
Optimum financing solutions
to enhance value
Our ability to enhance
buyer pool by expanding
finance options
Our ability to enhance
seller control
• Through buyer
qualification support
• Our ability to manage buyers
finance expectations
• Ability to monitor and
manage buyer/lender
progress, insuring timely,
predictable closings
• By relying on a world class
set of debt/equity sources
and presenting a tightly
underwritten credit file
WHY MMCC?
Closed 1,601
debt and equity
financings
in 2015
ACQUISITION FINANCING
ARDEN COURT APARTMENTS
24
FINANCIAL ANALYSIS
ARDEN COURT APARTMENTS
GROWTH RATE PROJECTIONS
25
FINANCIAL ANALYSIS
ARDEN COURT APARTMENTS
CASH FLOW
26
ARDEN COURT APARTMENTS
27
MARKET
COMPARABLES
8
ARDEN COURT APARTMENTS
SALES COMPARABLES MAP
28
ARDEN COURT APARTMENTS
(SUBJECT)
Cottage Villas of Arden Hills
Hart Lake Apartments
Fountain Terrace
Skywood Apartments
The Meadows of Coon
Rapids
SALES COMPARABLES
1
2
3
4
5
PROPERTY NAMEARDEN COURT APARTMENTS
COMPARABLES
29
Avg. $102.80
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
180.00
200.00
Arden Court
Apartments
Cottage
Villas of
Arden Hills
Hart Lake
Apartments
Fountain
Terrace
Skywood
Apartments
The Meadows
of Coon
Rapids
Average Price Per Square Foot
Avg. $93,763
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Arden Court
Apartments
Cottage
Villas of
Arden Hills
Hart Lake
Apartments
Fountain
Terrace
Skywood
Apartments
The Meadows
of Coon
Rapids
Average Price Per Unit
PROPERTY NAME
MARKETING TEAM
ARDEN COURT APARTMENTS
COMPARABLES
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
30
SALES COMPARABLES
rentpropertyname1
rentpropertyaddress1
673 VISTA ISLE DRIVE
673 VISTA ISLE DRIVE, SUNRISE, FL, 33325
ARDEN COURT APARTMENTS
346 CLEVELAND AVE SW, NEW BRIGHTON, MN, 55112
Units Unit Type
Offering Price: $5,416,500 37 1 Bdr
Price/Unit: $78,500 29 2 Bdr
Price/SF: $103.51 3 3 Bdr
CAP Rate: 5.41%
GRM: 8.05
Total No. of Units: 69
Year Built: 1964
Underwriting Criteria
Income $652,187 Expenses $359,322
NOI $292,865 Expenses/SF $6.87
Vacancy ($33,635) Expenses/Unit $5,208
3744 CLEVELAND AVE N, NEW BRIGHTON, MN, 55112
Units Unit Type
Close Of Escrow: 5/28/2015 15 1 Bdr 1 Bath
Sales Price: $5,648,970 30 2 Bdr 1 Bath
Price/Unit: $94,150 15 3 Bdr 1 Bath
Price/SF: $97.00
Total No. of Units: 60
Year Built: 1994
COTTAGE VILLAS OF ARDEN HILLS
1
3839 HART BLVD, COLUMBIA HEIGHTS, MN, 55421
HART LAKE APARTMENTS
Units Unit Type
Close Of Escrow: 9/30/2016 97 1 Bdr 0 Bath
Sales Price: $13,300,000 48 2 Bdr 0 Bath
Price/Unit: $91,724
Price/SF: $108.00
Total No. of Units: 145
Year Built: 1969
2
PROPERTY NAME
MARKETING TEAM
ARDEN COURT APARTMENTS
COMPARABLES
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
31
SALES COMPARABLES
Units Unit Type
Close Of Escrow: 8/17/2015 72 2 Bdr 1 Bath
Sales Price: $5,800,000
Price/Unit: $80,556
Price/SF: $111.00
Total No. of Units: 72
Year Built: 1964
FOUNTAIN TERRACE
3
751 1ST AVE NW, NEW BRIGHTON, MN, 55112 1200 CHERI LN NE, FRIDLEY, MN, 55421
Units Unit Type
Close Of Escrow: 4/28/2015 1 1 Bdr 1 Bath
Sales Price: $5,450,000 40 2 Bdr 1 Bath
Price/Unit: $75,694 32 3 Bdr 1 Bath
Price/SF: $81.00
Total No. of Units: 72
Year Built: 1963
SKYWOOD APARTMENTS
4
1770 121ST AVE NW, COON RAPIDS, MN, 55448
THE MEADOWS OF COON RAPIDS
Units Unit Type
Close Of Escrow: 7/27/2016 119 1 Bdr 0 Bath
Sales Price: $18,750,000 17 2 Bdr 0 Bath
Price/Unit: $126,689 12 3 Bdr 0 Bath
Price/SF: $117.00
Total No. of Units: 148
Year Built: 1992
5
8
ARDEN COURT APARTMENTS
RENT COMPARABLES MAP
ARDEN COURT APARTMENTS
(SUBJECT)
Rose Mall
Hamline Terrace
Aquarius
Brighton Village
Bramante's
Diamond Eight Terrace
Hart Lake Apartments
Equinox
Windsor South
Garden Grove
Chateau Royal Apartments
Granite Falls at Silver Lake
Cottage Villas of Arden Hills
Fountain Terrace
4
7
8
9
11
20
12
14
15
16
17
13
18
10
4
7
8
9
11
12
14
13
10
1
2
3
5
6
32
5
PROPERTY NAMEARDEN COURT APARTMENTS
COMPARABLES
33
AVERAGE OCCUPANCY
Avg. 98.94%
0
10
20
30
40
50
60
70
80
90
100
Arden Court
Apartments
Rose Mall Hamline
Terrace
Aquarius Brighton
Village
Bramante's Diamond
Eight
Terrace
Hart Lake
Apartments
Equinox Windsor
South
Chateau
Royal
Apartments
Cottage
Villas of
Arden Hills
Fountain
Terrace
PROPERTY NAMEARDEN COURT APARTMENTS
COMPARABLES
34
AVERAGE RENT
0
80
160
240
320
400
480
560
640
720
800
Hamline
Terrace
Aquarius Windsor
South
Garden
Grove
Chateau
Royal
Apartments
Studios
0
100
200
300
400
500
600
700
800
900
1,000
Arden Court
Apartments
Rose Mall Hamline
Terrace
Aquarius Brighton
Village
Bramante's Diamond
Eight
Terrace
Hart Lake
Apartments
Equinox Windsor
South
Garden
Grove
Chateau
Royal
Apartments
Granite
Falls at
Silver Lake
Cottage
Villas of
Arden Hills
1 Bedroom
Avg. $721
Avg. $879
PROPERTY NAMEARDEN COURT APARTMENTS
COMPARABLES
35
AVERAGE RENT
Avg. $1,042
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Arden Court
Apartments
Rose Mall Hamline
Terrace
Aquarius Brighton
Village
Bramante's Diamond
Eight
Terrace
Hart Lake
Apartments
Equinox Windsor
South
Garden
Grove
Chateau
Royal
Apartments
Granite
Falls at
Silver Lake
Cottage
Villas of
Arden Hills
Fountain
Terrace
2 Bedroom
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Arden Court
Apartments
Windsor
South
Cottage
Villas of
Arden Hills
3 Bedroom
Avg. $1,287
PROPERTY NAME
MARKETING TEAM
ARDEN COURT APARTMENTS
RENT COMPARABLES
ARDEN COURT APARTMENTS
346 CLEVELAND AVE SW, NEW BRIGHTON, MN, 55112
ARDEN COURT APARTMENTS
346 CLEVELAND AVE SW, NEW BRIGHTON, MN, 55112
ARDEN COURT APARTMENTS
346 CLEVELAND AVE SW, NEW BRIGHTON, MN, 55112
36
YEAR BUILT: 1964
ARDEN COURT APARTMENTS
346 CLEVELAND AVE SW, NEW BRIGHTON, MN, 55112
Unit Type Units SF Rent Rent/SF
1 Bdr 37 640 $751.19 $1.17
2 Bdr 29 882 $851.38 $0.97
3 Bdr 3 1,024 $1,112.50 $1.09
Total/Avg. 69 848 $905.02 $1.08
ROSE MALL2200 PASCAL ST, ROSEVILLE, MN, 55113
OCCUPANCY: 98% | YEAR BUILT: 1968
1
Unit Type Units SF Rent Rent/SF
1 Bdr 1 Bath 97 880 $945 $1.08
2 Bdr 1 Bath 65 1,000 $1,026 $1.03
Total/Avg. 162 940 $985.50 $1.06
AMENITIES
Detached garage parking available at $40 per month.
RUBS
The tenant is responsible for electric and cable. Owner pays heat, water,
sewer and waste removal.
HAMLINE TERRACE1360 TERRACE DR, ROSEVILLE, MN, 55113
2
Unit Type Units SF Rent Rent/SF
Studio 1 Bath 7 275-670 $669-$759 $1.52
1 Bdr 1 Bath 64 700-750 $879-$914 $1.24
2 Bdr 1 Bath 27 950 $1,084 $1.15
2 Bdr 1.5 Bath 4 1,100 $1,239 $1.13
Total/Avg. 102 812 $924.00 $1.26
OCCUPANCY: 98% | YEAR BUILT: 1968
RUBS
The tenant is responsible for electric and cable. Owner pays heat, water,
sewer and waste removal.
PROPERTY NAME
MARKETING TEAM
ARDEN COURT APARTMENTS
RENT COMPARABLES
AQUARIUS
2425 COUNTY ROAD C2 W, ROSEVILLE, MN, 55113
AQUARIUS
2425 COUNTY ROAD C2 W, ROSEVILLE, MN, 55113
AQUARIUS
2425 COUNTY ROAD C2 W, ROSEVILLE, MN, 55113
37
AQUARIUS 2425 COUNTY ROAD C2 W, ROSEVILLE, MN, 55113
OCCUPANCY: 100% | YEAR BUILT: 1960
3
Unit Type Units SF Rent Rent/SF
Studio 1 Bath 14 450 $734 $1.64
1 Bdr 1 Bath 49 727 $945 $1.30
2 Bdr 1 Bath 9 1,030 $1,052 $1.03
2 Bdr 1.5 Bath 3 1,080 $1,087 $1.01
2 Bdr 2 Bath 24 1,100 $1,214 $1.11
Total/Avg. 99 877 $1,006.40 $1.22
AMENITIES
Garage parking available for $50 per month.
The tenant is responsible for electric and cable. Owner pays heat, water,
sewer and waste removal.
BRIGHTON VILLAGE
900 COUNTY ROAD D W, NEW BRIGHTON, MN, 55112
OCCUPANCY: 99% | YEAR BUILT: 1971
4
Unit Type Units SF Rent Rent/SF
1 Bdr 1 Bath 97 750 $840-$940 $1.19
2 Bdr 1.5 Bath 144 1,025 $985-$1,100 $1.02
Total/Avg. 241 888 $966.25 $1.11
AMENITIES
Detached garage parking available for $40 per month.
The tenant is responsible for electric and cable. Owner pays heat, water,
sewer and waste removal.
BRAMANTE'S
800 COUNTY ROAD D W, NEW BRIGHTON, MN, 55112
5
Unit Type Units SF Rent Rent/SF
1 Bdr 1 Bath 42 825 $813 $0.99
2 Bdr 1.5 Bath 78 1,100 $928 $0.85
Total/Avg. 120 963 $870.50 $0.92
OCCUPANCY: 97% | YEAR BUILT: 1970
AMENITIES
Garage parking available at $40 per month.
The tenant is responsible for electric and cable. Owner pays heat, water,
sewer and waste removal.
PROPERTY NAME
MARKETING TEAM
ARDEN COURT APARTMENTS
RENT COMPARABLES
DIAMOND EIGHT TERRACE
3200 DIAMOND EIGHT TER, SAINT ANTHONY, MN, 55421
DIAMOND EIGHT TERRACE
3200 DIAMOND EIGHT TER, SAINT ANTHONY, MN, 55421
DIAMOND EIGHT TERRACE
3200 DIAMOND EIGHT TER, SAINT ANTHONY, MN, 55421
38
DIAMOND EIGHT TERRACE3200 DIAMOND EIGHT TER, SAINT ANTHONY, MN, 55421
OCCUPANCY: 100% | YEAR BUILT: 1962
6
Unit Type Units SF Rent Rent/SF
1 Bdr 1 Bath 63 625-705 $765-$880 $1.24
2 Bdr 1 Bath 81 940-950 $930-$1,150 $1.11
Total/Avg. 144 805 $931.25 $1.18
AMENITIES
Detached garage parking available for $60 per month.
The tenant is responsible for electric and cable. Owner pays heat, water,
sewer and waste removal.
HART LAKE APARTMENTS3839 HART BLVD, COLUMBIA HEIGHTS, MN, 55421
OCCUPANCY: 100% | YEAR BUILT: 1969
7
Unit Type Units SF Rent Rent/SF
1 Bdr 97 760 $860 $1.14
2 Bdr 48 960-1,100 $975-$1,040 $0.98
Total/Avg. 145 895 $958.33 $1.06
AMENITIES
Underground parking available for $50 per month; off-street parking for
$40 per month.
The tenant is responsible for electric and cable. Owner pays heat, water,
sewer and waste removal.
EQUINOX2808 SILVER LN NE, SAINT ANTHONY, MN, 55421
8
Unit Type Units SF Rent Rent/SF
1 Bdr 1 Bath 108 700 $845-$945 $1.28
1 Bdr 1 Bath 70 750-840 $895-$1,120 $1.27
2 Bdr 1 Bath 88 950-1,000 $1,075-$1,175 $1.16
Total/Avg. 266 823 $1,009.17 $1.24
OCCUPANCY: 99% | YEAR BUILT: 1971
The tenant is responsible for electric and cable. Owner pays heat,
water/sewer, and waste removal.
PROPERTY NAME
MARKETING TEAM
ARDEN COURT APARTMENTS
RENT COMPARABLES
WINDSOR SOUTH
2280 SILVER LN, NEW BRIGHTON, MN, 55112
WINDSOR SOUTH
2280 SILVER LN, NEW BRIGHTON, MN, 55112
WINDSOR SOUTH
2280 SILVER LN, NEW BRIGHTON, MN, 55112
39
WINDSOR SOUTH2280 SILVER LN, NEW BRIGHTON, MN, 55112
OCCUPANCY: 98% | YEAR BUILT: 1968
9
Unit Type Units SF Rent Rent/SF
Studio 1 Bath 20 365-548 $713-$880 $1.75
1 Bdr 1 Bath 68 677-734 $915-$1,016 $1.37
2 Bdr 1 Bath 46 866-920 $1,112-$1,214 $1.31
3 Bdr 1 Bath 1 1,031 $1,365 $1.33
Total/Avg. 135 772 $1,030.71 $1.44
AMENITIES
Detached garage parking available for $55 per month.
The tenant is responsible for electric and cable. Owner pays heat, water,
sewer and waste removal.
GARDEN GROVE750 5TH ST SW, NEW BRIGHTON, MN, 55112
YEAR BUILT: 1967
10
Unit Type Units SF Rent Rent/SF
Studio 1 Bath 4 450 $708 $1.58
1 Bdr 1 Bath 52 730 $808 $1.11
2 Bdr 1 Bath 61 800-860 $960-$985 $1.18
Total/Avg. 117 670 $865.25 $1.29
AMENITIES
Detached garage parking available for $65 per month.
The tenant is responsible for electric and cable. Owner pays heat, water,
sewer and waste removal.
CHATEAU ROYAL APARTMENTS590 CLEVELAND AVE N, NEW BRIGHTON, MN, 55112
11
Unit Type Units SF Rent Rent/SF
Studio 1 Bath 6 455 $650 $1.43
1 Bdr 1 Bath 28 650 $750 $1.16
2 Bdr 1 Bath 86 850-950 $850-$925 $0.99
Total/Avg. 120 668 $793.75 $1.19
OCCUPANCY: 100% | YEAR BUILT: 1968
AMENITIES
Garage stall included in rent.
The tenant is responsible for electric and cable. Owner pays heat, water,
sewer and waste removal.
PROPERTY NAME
MARKETING TEAM
ARDEN COURT APARTMENTS
RENT COMPARABLES
GRANITE FALLS AT SILVER LAKE
2130 COUNTY ROAD E W, NEW BRIGHTON, MN, 55112
GRANITE FALLS AT SILVER LAKE
2130 COUNTY ROAD E W, NEW BRIGHTON, MN, 55112
GRANITE FALLS AT SILVER LAKE
2130 COUNTY ROAD E W, NEW BRIGHTON, MN, 55112
40
GRANITE FALLS AT SILVER LAKE2130 COUNTY ROAD E W, NEW BRIGHTON, MN, 55112
YEAR BUILT: 1964
12
Unit Type Units SF Rent Rent/SF
1 Bdr 1 Bath 30 561 $850-$899 $1.56
2 Bdr 1 Bath 72 817 $999-$1,049 $1.26
Total/Avg. 102 689 $949.25 $1.41
AMENITIES
Detached garage parking available for $70 per month.
The tenant is responsible for electric and cable. Owner pays heat, water,
sewer and waste removal.
COTTAGE VILLAS OF ARDEN HILLS3744 CLEVELAND AVE N, NEW BRIGHTON, MN, 55112
OCCUPANCY: 98% | YEAR BUILT: 1994
13
Unit Type Units SF Rent Rent/SF
1 Bdr 1 Bath 15 758 $910 $1.21
2 Bdr 1 Bath 30 974 $1,037 $1.07
3 Bdr 1 Bath 15 1,190 $1,209 $1.02
Total/Avg. 60 974 $1,052.00 $1.10
The tenant is responsible for electric and cable. Owner pays heat, water,
sewer and waste removal.
FOUNTAIN TERRACE751 1ST AVE NW, NEW BRIGHTON, MN, 55112
14
Unit Type Units SF Rent Rent/SF
2 Bdr 1 Bath 72 726 $1,025-$1,100 $1.47
Total/Avg. 72 726 $1,062.50 $1.47
OCCUPANCY: 100% | YEAR BUILT: 1964
AMENITIES
The rent includes free cable and laundry. Garage parking available for $50
per month.
PETS
Deposit $300, $25 per month.
The tenant is responsible for electric and cable. Owner pays heat, water,
sewer and waste removal.
ARDEN COURT APARTMENTS
41
MARKET
OVERVIEW
Minneapolis-St. Paul-Bloomington Metro
Market Highlights
High median household income
The median household income is well above the national average.
Attractive business and living environment
Companies are attracted to the region’s high level of education and strong
work ethic.
Concentration of large-scale firms
Minneapolis-St. Paul is home to 16 Fortune 500 firms, including Target,
UnitedHealth Group, 3M and General Mills.
An abundance of higher education
There are more than 20 colleges and universities in the Twin Cities.
MINNEAPOLIS-ST. PAUL
The Minneapolis-St. Paul metro is situated in the southeastern portion of
central Minnesota and extends into western Wisconsin. Nearly 1,000 of
Minnesota’s 10,000 lakes are located within the metro, along with the
Mississippi, Minnesota and St. Croix rivers. The Twin Cities of Minneapolis and
St. Paul straddle the Mississippi River, with Minneapolis located upstream
from St. Paul. The metro covers 6,364 square miles of fertile soil atop
limestone and sandstone and includes 13 counties, two of which are in
Wisconsin.
Geography
ARDEN COURT APARTMENTS
42
Minneapolis-St. Paul metro is the largest metropolitan area in the state of Minnesota and is served by the
Minneapolis-St. Paul International Airport and six reliever airports.
Two major freeway systems run through the region: Interstate 94 and Interstate 35. I-35 splits into I-35E, which
runs through St. Paul, and I-35W, which passes through Minneapolis. Two beltline freeways, Interstates 494
and 694, facilitate travel around the suburbs, and Interstate 394 runs east to west from I-94 to I-494.
Metro Transit operates bus, commuter rail and light-rail systems throughout the metro, and some suburban
cities have their own bus systems. The METRO Blue Line runs along Hiawatha Avenue, connecting downtown
Minneapolis with the airport and Mall of America, while the Green line links Minneapolis with the University of
Minnesota and Downtown St. Paul. The Northstar commuter line services the northern suburbs.
Infrastructure
The Minneapolis-St. Paul Metro is:
75 miles from Rochester
300 miles from Milwaukee
400 miles from Chicago
600 miles from Indianapolis
Airports
Minneapolis-St. Paul International Airport
Six reliever airports
Major Roadways
Interstates 35W, 35E, 94, 394, 494 and 694
Rail
Freight – BNSF and Union Pacific
Passenger – Amtrak
Commuter – Northstar and METRO light rail
The 13-county Minneapolis-St. Paul-Bloomington metro contains more than 200 municipalities and registers a
population of more than 3.5 million. The Twin Cities metro area encompasses the seven core counties of the
region, the largest being Hennepin County. Minneapolis is the most populated city in the state, with 404,400
citizens, followed by St. Paul, the capital city, with 298,500 residents.
Metro
Largest Cities in Metro by Population
Minneapolis 404,400
St. Paul 298,500
Bloomington 86,700
Brooklyn Park 80,500
Plymouth 76,000
Maple Grove 67,700
* Forecast
Sources: Marcus & Millichap Research Services; U.S. Census
Bureau; Experian
MINNEAPOLIS-ST. PAUL
ARDEN COURT APARTMENTS
43
The metro has a diverse economic base and is home to 16 Fortune 500
companies. The local GMP will increase by an estimated 3.4 percent this year.
The Twin Cities are involved in all aspects of the food delivery system, from initial
production to final sale. Similar to many other Midwestern cities, the metro has a
strong manufacturing base, encompassing both traditional industry and high-tech
manufacturing. Relative to other areas, the metro has a large concentration of
technology companies. Many are biomedical firms developed from research at
the University of Minnesota and the Mayo Clinic, located 75 miles south of the
metro in Rochester. Google has established a tech hub in Minneapolis to help
foster and nurture startups. The region is also the base of a number of major
retailers, including Select Comfort, Target and Best Buy.
Minneapolis houses the Ninth Federal Reserve District, which services
Minnesota, the Dakotas, Montana and portions of Michigan and Wisconsin. A
number of financial and insurance institutions are also headquartered or have
significant operations locally.
An ability to handle air, land, river and sea transportation ranks the metro among
the top in the nation for its logistics infrastructure. Its location in the upper
Midwest has made the Twin Cities a hub for motor freight companies. Barge lines
operate on the Mississippi, Minnesota and St. Croix rivers, transporting
agricultural goods to the world via the Mississippi. Minneapolis is only 150 miles
from the Port of Duluth, which connects to the Atlantic Ocean through the Great
Lakes/St. Lawrence Seaway System.
Economy
* Forecast
Sources: Marcus & Millichap Research Services; Bureau of Economic
Analysis; Moody’s Analytics; U.S. Census Bureau; Fortune
MINNEAPOLIS-ST. PAUL
ARDEN COURT APARTMENTS
44
Skilled employees, quality of life and a diverse economy allow for a stable job base. The metro boasts a well-
educated labor pool, with approximately 94 percent of the population age 25 and older attaining a high-
school diploma. It also ranks highly for its percentage of population age 25 and older with at least a
bachelor’s degree, at 38 percent. There are more than 20 institutions of higher learning in the metro, providing
education and training to keep the local labor force among the most skilled in the country. The local economy
is supported by 1.9 million jobs in a wide range of sectors. Over the next five years, employment in the metro
is expected to grow by 1.2 percent annually, slightly lower than the U.S. average.
Once dominated by agriculture and manufacturing, the local economy is now driven by the trade,
transportation and utilities sector, which employs approximately 347,000 people, or 18 percent of the
workforce. A significant portion of these jobs are provided by the many retailers in the area as well as
Minneapolis-St. Paul International Airport. The airport is the home of Sun Country Airlines as well as a
regional hub for Delta Airlines, which continues to expand its average daily flights. This segment is forecast to
increase 0.4 percent annually over the next five years.
Another 16 percent, or 317,100 jobs, in the metro are in the education and health services sector, which is
expected to expand by 2.1 percent annually through 2020. The professional and business services sector
also provides 16 percent of the workforce, or 314,300 jobs, and will record growth at 2.7 percent annually
during this time.
Labor
* Forecast
Sources: Marcus & Millichap Research Services; BLS; Moody’s
Analytics
MINNEAPOLIS-ST. PAUL
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45
Large employers in the Twin Cities area include the state of Minnesota, the U.S. government and the University of Minnesota. Other major employers fall within the banking,
financial services, technology and healthcare sectors.
Wells Fargo, Ameriprise Financial and US Bank drive the banking and financial services sector, while Allina Health System, Fairview Health Services and United Health
Group Inc. are key players in the growing healthcare industry.
Technology companies such as 3M, St. Jude Medical and Medtronic maintain large presences in the region. Best Buy and Target have significant workforces in the retail
sector, as both have headquarters here.
The Mall of America, located in Bloomington, is one of the most popular tourist destinations in the nation, with roughly 40 million visitors annually, making its local economic
impact significant. The mall employs more than 11,000 year-round workers and generates nearly $2 billion annually in economic activity for the state. Work will be
completed this year on a $325 million expansion of the mall, which will provide 50 to 75 new shops and restaurants as well as 180,000 square feet of office space and a
342-room JW Marriott hotel.
Employers
Major Employers
Target Corp.
University of Minnesota
Allina Health System
Fairview Health Services
Best Buy Co. Inc.
Wells Fargo Minnesota
3M Co.
United Health Group Inc.
Health Partners
U.S. Bancorp
* Forecast
Sources: Marcus & Millichap Research Services; Moody’s
Analytics; BLS
MINNEAPOLIS-ST. PAUL
ARDEN COURT APARTMENTS
46
Population growth in the metro has exceeded the national level since 1990 and will continue to do so over the next five years. Gains are expected to register 0.9 percent
annually through 2020. High-growth areas typically fall outside of the urban core; however, new apartment and condo developments recently completed and planned in the
central cities will likely boost the populations in both Minneapolis and St. Paul in the upcoming years.
Robust growth in the metro has been supported by an expanding population of well-educated and highly skilled young professionals. The region is home to the University
of Minnesota, which has one of largest student populations in the United States at 50,700. Many of the graduates remain in the area, employed by large corporations
headquartered in the region. More than 38 percent of residents have attained at least a bachelor’s degree, compared with just 29 percent for the country. The highly skilled
workforce has helped raise the median household income to nearly $70,500 annually, well above the national median.
Above-average household incomes have enabled more than 70 percent of residents in the metro to own their own home, which is higher than the U.S. rate at 64 percent.
Home prices will rise faster than household incomes during the next five years; the median price is approaching $224,900.
Demographics
MINNEAPOLIS-ST. PAUL
* Forecast
Sources: Marcus & Millichap Research Services; AGS; Experian;
Moody’s Analytics; U.S. Census Bureau
ARDEN COURT APARTMENTS
47
The vibrant metro area is the entertainment and cultural center of the upper Midwest. Scenery in the metro includes contemporary skylines, historic architecture and
greenways of parks, lakes and the Mississippi, St. Croix and Minnesota rivers. Outdoor venues include the Como Park Zoo, Marjorie McNeely Conservatory, the Minnesota
Zoo, the Minnesota Landscape Arboretum and a number of ski runs and golf courses.
The region is home to many professional sports teams, including the Minnesota Vikings, the Minnesota Twins, the Minnesota Timberwolves, the Minnesota Wild and the
Minnesota United. College sports are also enjoyed at the University of Minnesota Twin Cities campus. The Vikings new facility (US Bank Stadium) will be completed in time
for the 2016 football season. The metro is scheduled to host Super Bowl 52 in 2018 and the Men's NCAA Final Four in 2019.
The Twin Cities are noted for their array of theaters, orchestras, art museums and gardens. These include the Walker Art Center, Hennepin County Library, the Guthrie
Theater and the Minneapolis Institute of Arts. The region has more than 100 theater venues, making it the third-largest theater market in the country. Arts education is also
strong in the area, supported by the Minneapolis College of Arts and Design, the Children’s Theatre Company, MacPhail Center for the Arts, Perpich Center for Arts
Education and a variety of education programs at local museums.
Quality of Life
MINNEAPOLIS-ST. PAUL
ARDEN COURT APARTMENTS
* Forecast
Sources: Marcus & Millichap Research Services; National
Association of Realtors; Moody’s Analytics; U.S. Census Bureau
48
2016 Multifamily Forecast
Construction: Following the delivery of
4,600 apartments last year, 4,000 units
are expected to be completed in 2016.
This total will include 700 affordable
and 300 senior units. Construction will
be widespread with nearly all of the
metro’s submarkets receiving new
rentals.
Vacancy: The vacancy rate will remainbelow 3 percent for the thirdconsecutive year, ending 2016 at 2.9percent as tenant demand keeps pacewith deliveries. Last year, vacancy alsoregistered 2.9 percent on netabsorption of nearly 3,900 units.
Rents: Tight vacancy will continue tofoster rent growth. After a 4.8 percentclimb was registered last year, effectiverents will soar 5.7 percent to an averageof $1,161 per month in 2016, anincrease of 18.5 percent in the last fiveyears.
Employment: Approximately 31,900
jobs were created in 2015, led by
strong growth in the healthcare
industry. Employers will step up the
pace of hiring this year with staffs
increasing by 35,000 workers
metrowide, a 1.8 percent rise.
ARDEN COURT APARTMENTS
49
Healthy Apartment Market Keeps Headwinds at Bay
1.8%
increase
in total
employment
units
will be
completed
4,000
basis point
increase in
vacancy
0
5.7%
increase
in effective
rents
MINNEAPOLIS-ST. PAUL METRO AREA
A highly skilled labor force and a notable quality of life attract employers and workers to
the Twin Cities metro, underpinning the demand for apartments. The region has gained
more than 435,100 residents in the past five years, many coming for job opportunities.
Employment has been relatively steady, keeping the unemployment rate among the lowest in
the nation. The need for housing has activated developers and more than 18,300 units were
completed in the same five-year period. Construction has been concentrated near the
downtown cores, but as vacancy in many suburbs hovers below the traditional replacement
level, building is spreading throughout the region. Rising construction costs, however, could
hinder some larger projects from moving forward in the quarters ahead. This is most likely near
the cores and submarkets such as Uptown/St. Louis Park where a wave of new inventory
leasing up has pushed vacancy higher. Rising rents, particularly near Downtown Minneapolis
and St. Paul, could drive some tenants farther from the core into more affordable rentals, while
others may consider homeownership.
Capital continues to flow into the Minneapolis-St. Paul metro, providing a robust bidding
environment as buyers outnumber available listings. With investors plentiful and average
prices nearly doubling since the cyclical trough in 2009, owners without a long-term hold
strategy may find this an opportune time to list. Exchange buyers are active; some are selling
assets in larger cities and seeking steady cash flows in quality properties in this relatively stable
Midwest metro. Private local investors have also stepped up purchasing, focusing mainly on
value-add opportunities. As a result, older Class B/C buildings under $5 million are in demand
at initial yields that are typically in the 7 percent span. New construction is also providing buying
opportunities at the top end of the market. Properties in the lease-up period can trade at a sub-
five cap rate and are generally in the 5 percent area if stabilized.
Economy
Housing and Demographics
** Trailing 12 months through 1Q
Sources: Marcus & Millichap Research Services; Economy.com; NAR
* Forecast
Sources: Marcus & Millichap Research Services; Bureau of Labor
Statistics; Economy.com
ARDEN COURT APARTMENTS
50
MINNEAPOLIS-ST. PAUL METRO AREA
Job opportunities are attracting new residents to the region. In the last four quarters, the population has grown by nearly 35,000 people, nearly 10 percent
of whichare in the prime renter cohort of ages 20 to 34. These gains should spawn demand for apartments.
The monthly rent on an apartment built since 2000 is $270 more than the mortgage payment for a median-priced home in the metro, using traditional
financing and assuming 20 percent down with taxes and insurance included. This difference will likely motivate some tenants to consider homeownership
this year.
The median income in the metro rose 0.5 percent to $70,500 per year in the last 12 months, which is $15,000 more than is needed to qualify for a
mortgage on a median-priced home. The median home price, however, jumped 3.7 percent to $232,500 during the same period, making
homeownership less attainable for some renters.
Outlook: A 20.5 percent surge in single-family home completions and an 8.3 percent rise in home sales during the past four quarters may indicate that
motivation to purchase a home is rising. Tenants who lack the funds for a downpayment, prefer luxury amenities or choose to live in urban
neighborhoods where housing prices are far above the metro average will likely remain in the renter pool longer.
During the first quarter of 2016, employers created 10,300 positions, raising the 12-month total to 33,000
slots, a 1.7 percent gain. One year earlier, 39,000 new workers were hired.
The largest staff increases were among healthcare firms. This segment generated nearly 9,400 jobs in the 12-
month period. It was followed by the leisure and hospitality sector with roughly 4,600 people as new hotels
and restaurants opened. Expansion in this sector bodes well for the apartment market as many of these
employees are likely to rent.
The added jobs kept the unemployment rate in March at 3.4 percent. This is the eighth consecutive quarter
the rate has remained below 4 percent.
Outlook: After 31,900 jobs were created in 2015, employers will increase the pace of hiring this year,
expanding headcounts by 35,000 additional workers metrowide, a 1.8 percent rise.
Construction
Vacancy
* Forecast
Sources: Marcus & Millichap Research Services; MPF Research
* Forecast
Sources: Marcus & Millichap Research Services; MPF Research
ARDEN COURT APARTMENTS
MINNEAPOLIS-ST. PAUL METRO AREA
51
The slowest pace of deliveries in six months lowered the vacancy rate 30 basis points year over year in the
first quarter to 2.6 percent. This is the ninth consecutive quarter with the rate below 3 percent even though
11,100 apartments have been delivered during that time.
By submarket, the tightest vacancy in March was found in Anoka County at 1.3 percent, down 100 basis
points over the last four quarters, despite the delivery of 320 units during this period. The second-lowest
average effective rent metrowide, at $957 per month, attracts renters to the submarket.
Vacancy is especially low in properties constructed before 1970 and during the 1990s at 1.7 and 1.8 percent,
respectively. The rate in the latter dropped 140 basis points during the last 12 months as more affordable
rents than are available in newer units drew tenants to this vintage.
Outlook: Tenant demand for apartments will keep pace with construction, resulting in the vacancy rate
remaining below 3 percent. Vacancy will end 2016 at 2.9 percent, mirroring last year’s rate.
Developers finalized 671 apartments during the first three months of 2016, bringing the year-over-year total to
4,650 units. This total includes 850 affordable, 660 student and 650 senior apartments. In the previous 12
months, 5,500 rentals were brought into service.
Construction activity is slowly descending from the 2014 peak. There are approximately 4,900 apartments
underway with completions expected through the end of 2017. In addition, roughly 9,300 units have been
proposed.
The A-Mill Artist Lofts was the largest apartment project completed in the opening quarter of 2016. The
former Pillsbury flour mill complex on S.E. Main Street in Minneapolis has been converted into 251 affordable
rentals for working artists and is fully occupied.
Outlook: In 2016, apartment inventory will expand by 1.5 percent with the addition of 4,000 rentals.
Construction will be widespread with nearly all of the metro’s submarkets receiving new units.
Rents
Sales Trends
** Trailing 12 months through 1Q
Sources: Marcus & Millichap Research Services; CoStar Group, Inc.;
Real Capital Analytics
* Forecast
Sources: Marcus & Millichap Research Services; MPF Research
ARDEN COURT APARTMENTS
MINNEAPOLIS-ST. PAUL METRO AREA
52
Sales activity has been limited only by the availability of listings amid robust investor interest. During the last four quarters,
transaction flow rose 10 percent following a 38 percent jump in the previous 12 months. Buyers focused on properties in
the neighborhoods surrounding downtown St. Paul and in the Uptown/West Calhoun/Bryn Mawr area.
Increased investor competition drove the price up 18 percent to an average of $126,500 per unit over the last four quarters.
Assets in the city of St. Paul traded below the metro average at $96,100 per door as mainly older Class C buildings changed
hands during this period.
Stabilized Class A properties are typically listed in the low- to mid-5 percent area with Class C assets trading 100 basis
points higher. Intense competition for quality value-add buildings can result in cap rates dropping below 5 percent.
Outlook: Strong tenant demand for older properties will continue to attract investors to Class C assets with below market
rents. Buildings that can be quickly upgraded and have rents adjusted higher will especially be desired.
Effective rent jumped 5.7 percent to an average of $1,121 per month in the last 12-month period, this was the
largest annual increase since 2008. Rent climbed 4.0 percent one year earlier.
Among submarkets, the greatest effective rent growth was registered in Central St. Paul at 8.5 percent to $1,230
per month in the last four quarters. Vacancy here at 2.9 percent rests slightly above the metro average. The highest
average rents metrowide are found in the Downtown Minneapolis/University submarket at $1,458 per month, up
4.0 percent during the last 12 months.
By vintage, the most substantial rent growth in the annual period ending in March was in apartments built before
1970. Here, effective rents climbed 7.5 percent to an average of $904 per month, although they remain the most
affordable among the age tranches.
Outlook: Tight vacancy will continue to foster rent growth this year. The average effective rent will soar 5.7 percent
to $1,161 per month, up 18.5 percent in the last five years.
Capital Markets
Local Highlights
ARDEN COURT APARTMENTS
53
The U.S. economy is resuming its steady pace of growth following an extended period of financial market volatility to start the year. Recent reports have highlighted a stable
consumer environment, particularly as the labor market continues to improve. Advancement in commodity prices has reduced strain in the sector, helping oil-related
economies bounce back. Meanwhile, commercial credit availability remains robust, prompting a positive outlook over the coming months.
Developer activity remains robust, with deliveries for 2016 expected to top 285,000 units, the most new apartments delivered in a year since the 1980s. Lenders have begun
to more closely monitor development activity and are now tightening funding for new projects in markets they believe face overdevelopment risk. With builder activity
concentrated in just 10 major metros nationally, those markets are receiving the greatest scrutiny. Lenders will likely continue evaluating each project carefully, which will
benefit the sector by reducing risks of overdevelopment.
The capital markets environment continues to be highly competitive, with Fannie Mae and Freddie Mac underwriting loans up to 10 years with maximum leverage of 80
percent. Pricing will typically reside between the high-3 percent range to the low-4 percent range, depending on deal size. Portfolio lenders will also price in this range but will
typically require loan-to-value ratios closer to 65 percent. Floating bridge loans and financing for repositionings are typically underwritten with loan-to-value ratios above 80
percent, while pricing at 250 basis points above Libor for recourse and extending to 450 basis points above Libor for non-recourse deals.
As rents rise, apartment affordability is becoming an issue. This year, developers will bring 700 affordable units into service throughout four of the metro’s 14 submarkets.
Downtown Minneapolis/University will receive the highest portion with 285 rentals followed by West St. Paul with 214. The remainder are in North Minneapolis and Eden
Prairie/Shakopee/Chaska. The largest affordable project is A-Mill Artist Lofts in Minneapolis with 251 apartments.
The Trust for Public Land recently ranked Minneapolis and St. Paul as top in the nation for the best urban park systems among big cities. This designation and the resulting
publicity should call attention to the Twin Cities high quality of life and assist in attracting residents to the area.
Fresh Thyme grocery is increasing its expansion plans in the metro. The company expects to debut 12 to 16 stores in the region. Lucky’s and Hy-Vee are other grocers
seeking sites in the region. Hy-Vee is not only adding big-box grocery stores, but the firm is also scouting for sites to open a number of small stores with gas pumps. The
10,000- to 15,000-square-foot facilities are expected to offer groceries and prepared food. The added retail jobs should benefit apartments nearby.
Condo construction is proliferating. One of the largest projects opening this year is Portland Tower in Minneapolis. The 17-story tower will offer 110 for-sale units, which could
compete with nearby luxury apartments.
MINNEAPOLIS-ST. PAUL METRO AREA
PROPERTY NAME
MARKETING TEAM
ARDEN COURT APARTMENTS
DEMOGRAPHICS
Source: © 2015 Experian
Created on September 2016
POPULATION 1 Miles 3 Miles 5 Miles
2020 Projection
Total Population 6,657 78,652 231,039
2015 Estimate
Total Population 6,670 78,349 229,075
2010 Census
Total Population 6,458 75,079 219,776
2000 Census
Total Population 6,681 75,740 220,195
Daytime Population
2015 Estimate 9,933 120,980 303,246
HOUSEHOLDS 1 Miles 3 Miles 5 Miles
2020 Projection
Total Households 2,810 33,426 97,786
2015 Estimate
Total Households 2,806 33,049 96,489
Average (Mean) Household Size 2.36 2.25 2.30
2010 Census
Total Households 2,698 31,448 92,058
2000 Census
Total Households 2,840 31,614 92,312
Growth 2015-2020 0.14% 1.14% 1.34%
HOUSING UNITS 1 Miles 3 Miles 5 Miles
Occupied Units
2020 Projection 2,810 33,426 97,786
2015 Estimate 2,901 33,820 98,935
Owner Occupied 1,576 22,786 59,683
Renter Occupied 1,230 10,262 36,806
Vacant 96 771 2,445
Persons In Units
2015 Estimate Total Occupied Units 2,806 33,049 96,489
1 Person Units 29.62% 34.53% 33.55%
2 Person Units 35.67% 34.85% 34.25%
3 Person Units 15.75% 13.35% 14.20%
4 Person Units 11.55% 10.52% 10.55%
5 Person Units 4.95% 4.17% 4.52%
6+ Person Units 2.42% 2.57% 2.94%
HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles
2015 Estimate
$200,000 or More 4.12% 4.84% 3.82%
$150,000 - $199,000 6.34% 6.14% 5.23%
$100,000 - $149,000 16.48% 16.62% 13.88%
$75,000 - $99,999 12.25% 13.48% 13.56%
$50,000 - $74,999 20.67% 18.4% 18.62%
$35,000 - $49,999 12.18% 12.49% 13.43%
$25,000 - $34,999 13.02% 10.57% 10.35%
$15,000 - $24,999 7.5% 8.76% 10.22%
Under $15,000 7.45% 8.7% 10.88%
Average Household Income $81,916 $84,680 $76,615
Median Household Income $61,853 $62,266 $56,539
Per Capita Income $34,819 $36,501 $32,724
POPULATION PROFILE 1 Miles 3 Miles 5 Miles
Population By Age
2015 Estimate Total Population 6,670 78,349 229,075
Under 20 24.21% 22.48% 22.3%
20 to 34 Years 25.36% 21.7% 26.24%
35 to 39 Years 5.72% 5.52% 6.02%
40 to 49 Years 11.67% 11.12% 11.4%
50 to 64 Years 17.98% 20.04% 18.91%
Age 65+ 15.06% 19.15% 15.13%
Median Age 35.34 40.28 36.12
Population 25+ by Education Level
2015 Estimate Population Age 25+ 4,502 54,750 155,828
Elementary (0-8) 0.45% 0.89% 1.42%
Some High School (9-11) 4.35% 3.44% 4.09%
High School Graduate (12) 21.73% 21.87% 22.85%
Some College (13-15) 19.66% 19.27% 20.28%
Associate Degree Only 10.01% 9% 8.41%
Bachelors Degree Only 27.8% 27.69% 25.37%
Graduate Degree 15.18% 16.71% 16.31%
Population by Gender
2015 Estimate Total Population 6,670 78,349 229,075
Male Population 49.76% 47.67% 48.98%
Female Population 50.24% 52.33% 51.02%
54
Income
In 2015, the median household income for your selected geography is
$61,853, compare this to the US average which is currently $54,148.
The median household income for your area has changed by 25.70%
since 2000. It is estimated that the median household income in your
area will be $69,736 five years from now, which represents a change
of 12.74% from the current year.
The current year per capita income in your area is $34,819, compare
this to the US average, which is $29,638. The current year average
household income in your area is $81,916, compare this to the US
average which is $77,468.
Population
In 2015, the population in your selected geography is 6,670. The
population has changed by -0.16% since 2000. It is estimated that
the population in your area will be 6,657.00 five years from now,
which represents a change of -0.19% from the current year. The
current population is 49.76% male and 50.24% female. The median
age of the population in your area is 35.34, compare this to the US
average which is 37.55. The population density in your area is
2,117.37 people per square mile.
Households
There are currently 2,806 households in your selected geography. The
number of households has changed by -1.20% since 2000. It is
estimated that the number of households in your area will be 2,810
five years from now, which represents a change of 0.14% from the
current year. The average household size in your area is 2.36 persons.
Employment
In 2015, there are 4,671 employees in your selected area, this is also
known as the daytime population. The 2000 Census revealed that
73.36% of employees are employed in white-collar occupations in
this geography, and 27.52% are employed in blue-collar occupations.
In 2015, unemployment in this area is 2.03%. In 2000, the average
time traveled to work was 22.00 minutes.
Race and Ethnicity
The current year racial makeup of your selected area is as follows:
78.3% White, 7.58% Black, 0.01% Native American and 6.7%
Asian/Pacific Islander. Compare these to US averages which are:
70.98% White, 12.77% Black, 0.19% Native American and 5.25%
Asian/Pacific Islander. People of Hispanic origin are counted
independently of race.
People of Hispanic origin make up 6% of the current year population
in your selected area. Compare this to the US average of 17.53%.
PROPERTY NAME
MARKETING TEAM
ARDEN COURT APARTMENTS
Housing
The median housing value in your area was $207,470 in 2015,
compare this to the US average of $185,104. In 2000, there were
1,631 owner occupied housing units in your area and there were
1,209 renter occupied housing units in your area. The median rent at
the time was $657.
Source: © 2015 Experian
DEMOGRAPHICS
55
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