minneapolis-st. paul

www.colliersmsp.com

highlights> Demand, especially from national institutional buyers, exceeds supply.> There is strong demand and high sale prices for smaller properties in key urban areas, especially

Uptown. > City Limits in Minneapolis and Oakdale Village in Oakdale, two large, class C properties, were recently

sold by local investor Dominium. There is strong demand for these types of properties among national groups that are highly motivated to place capital in the Minneapolis-St. Paul market in an effort to chase yield.

> Construction is concentrated in urban markets such as the North Loop and Loring neighborhoods of Minneapolis, areas of St. Louis Park, and near the University of Minnesota.

> The University area market has close proximity to Minneapolis CBD populations in addition to strong demand from foreign and graduate students and employees of the University and area hospitals.

> Developers active in the market include those that plan to hold the investment for income property, and merchant developers, such as Opus, who plan to sell after completing construction.

> Vacancy levels are very low, but moderate rent growth is occurring given the few available units. In addition to the market not being a historically strong rent-growth market, the improving housing market and significant new construction has muted rent growth.

> Rising interest rates will put constraints on pricing and increase cap rates in addition to decreasing the prospective buyer pool.

> Employment growth is a key indicator of the health of the apartment market, and employment growth in the area remains steady.

> Minneapolis-St. Paul will remain a premier market with low vacancy rates and strong interest from national institutional and private equity groups in addition to strong local demand.

Q2 2013 | apartment

aPaRTMENT MaRkET REPORT

market indicators

Q2 2013

VacancY —

rents

transaction actiVitY

price per unit

cap rates

aVerage rent and VacancY monthlY emploYment trends

Strong Pricing in the Investment Market; Development Heats up; Interest Rates Put a Damper on Cap Rates

market report | Q2 2013 | apartment | minneapolis-st. paul

apartment sales units under construction

market report | Q2 2013 | apartment | minneapolis-st. paul

significant apartment sale actiVitY

Building address citY size (units) BuYer seller price price per

unitsale date

City Limits 127 E 59th St Minneapolis 198Monarch Investment and Management Group

Dominium $12,000,000 $60,606 Jun-13

Dellwood Estates apart-ments 749 E River Rd anoka 132 INREIT Properties

LLLPGregerson Melvin C & Myrna E $11,500,000 $87,121 Jun-13

Oakdale Village 1213 Gentry ave N Oakdale 175 Nationwide Housing Corp. Dominium $11,450,000 $65,429 May-13

Twin Lakes Manor 3305, 3413 53rd ave N

Brooklyn Center 310 Soderberg apart-

ment Specialists TCF Financial Corp $9,900,000 $31,935 apr-13

Rolling Hills 1325 Westminis-ter St St. Paul 108 Lutheran Social

ServicesRich Pakonen & Clint Blaiser $4,750,000 $43,981 Jun-13

Granite Peaks 3907-3911 65th ave N Minneapolis 54 Soderberg apart-

ment Specialists Fannie Mae $3,960,000 $73,333 May-13

525 Second St SE 525 Second St SE Osseo 40 Osseo aCQ LLC Osseo Investments LLC $2,400,000 $60,000 apr-13

Pinecrest apartments 5451 Fifth St NE Fridley 32 Mateer Properties Pinecrest apart-ments LLC $2,185,000 $68,281 apr-13

Humboldt apartments 508-510 Humboldt ave S St. Paul 82 Real Estate Equities amherst H. Wilder

Foundation $2,000,000 $24,390 May-13

The Cathedral Lofts 265 Dayton ave St. Paul 28 David a & Gary a Hornig

Elevate Property Management - The Bayard apartments

$1,950,000 $69,643 Jun-13

Como Park apartments 805-811 Como ave St. Paul 32 DRS Investment LLC at Home apart-ments $1,900,000 $59,375 Jun-13

2315 Colfax ave S 2315 Colfax ave S Minneapolis 24 at Home apart-ments

Towle Financial Services $1,656,000 $69,000 Jun-13

2100 Bryant ave S 2100 Bryant ave S Minneapolis 24 Gremar Properties LLC

David a & Barbara M Hornig $1,552,941 $64,706 May-13

1928 Emerson ave S 1928 Emerson ave S Minneapolis 13 Rent Inc. Eof Investments

LLC $1,465,000 $112,692 May-13

1425-1445 Bidwell St 1425-1445 Bidwell St West St. Paul 24 DRS Investment LLC HCP Properties, Inc. $1,350,000 $56,250 apr-13

2101 Hennepin ave 2101 Hennepin ave Minneapolis 11 Gremar Properties LLC

Gary and Sandra Hornig, David and Barbara Hornig

$1,300,000 $118,182 May-13

2730 Dupont ave S 2730 Dupont ave S Minneapolis 17 David a & Gary a Hornig

Baron Bradley J & Beverly EH $1,262,500 $74,265 May-13

2820 First ave S 2820 First ave S Minneapolis 23 Copenhagen-Hansen Family LLLP

2820 First avenue South LLC $995,000 $43,261 May-13

3701 Pleasant ave S 3701 Pleasant ave S Minneapolis 16 Christopher a &

Lauri B DolezalNagel Richard C & Jeanne M $922,059 $57,629 Jun-13

Six Thirty Nine apart-ments 639 23rd ave NE Minneapolis 18 639 23rd avenue

NE LLCPeterson Property Management LLC $900,000 $50,000 apr-13

Wabasha apartments 426 Wabasha St S St. Paul 21 Bushard Construc-tion Central Bank $895,000 $42,619 apr-13

846 Pierce Butler Route 846 Pierce Butler Route St. Paul 23 Dadders Properties

LLC Sunrise Banks $877,000 $38,130 apr-13

1338 Seventh St E 1338 Seventh St E St. Paul 17 american LLC Elisoph LLC $749,000 $44,059 May-13

www.colliers.com/marketname

Minneapolis-St. Paul 4350 Baker Road, Suite 400 Minnetonka, MN 55343DIRECT 952 897 7700www.colliersmsp.com

accelerating success.

482 offices in 62 countries

• $2 billion USD in annual revenue

• 13,500 professionals and staff

• 1.2 billion* square feet under management

• $71 billion USD in total transaction value* Together, Colliers International and FirstService manage 2.51 billion

square feet of property - second largest in the world.

market report | Q4 2011 | office | minneapolis-st. paul