Expanding into the Twin Cities: Dakota REIT acquires three buildings in Minneapolis/St. Paul market

Eagle Point Office Center II

Eagle Point Office Center II

by Dan Rafter

For Jim Knutson, it only made sense: The REIT he serves as executive vice president, Fargo, North Dakota-based Dakota REIT, was ready to expand. Few markets were as promising as the Minneapolis/St. Paul region.

So Knutson and his fellow Dakota REIT officials have worked with Cushman & Wakefield|NorthMarq to acquire three commercial buildings totaling 115,000 square feet in this market during the past nine months.

And Knutson says that Dakota REIT is far from through with its investment in the Twin Cities.

“I can’t say that we are looking for X number of properties in the Twin Cities market. But if the right property comes along, we will be interested,” Knutson said. “We want to be invested in this market. We are the type of REIT that acquires properties and manages them for the long term. We are not the type that comes in, buys a property and then sells it after two or three years. That is not our intent. Our intent is to hold properties for the long term.”

Dating back to December of 2014, Dakota REIT has acquired Eagle Point Office Center III, a two-story, 40,000-square-foot office building in Lake Elmo, Minnesota; Eagle Point Office Center II, a single-story, 30,000-square-foot office building also in Lake Elmo; and Plymouth 6-61, a 45,000-square-foot industrial building in Plymouth, Minnesota.

Knutson said that Dakota REIT considers several factors when determining what commercial buildings to acquire. The three buildings that the REIT has acquired in the Twin Cities market all have positive features that Dakota demands in its acquisitions, Knutson said.

For example, the buildings feature long-term tenants and property-management teams that have worked hard to maintain the buildings and serve these tenants. The areas surrounding the buildings boast commercial properties that attract high rents, and the markets in which they sit are strong and active ones today.

“We were comfortable with all those factors in these three acquisitions,” Knutson said.

Those factors are more important than building type, Knutson said. So far, Dakota REIT’s portfolio is made up of about 60 percent multifamily buildings and about 40 percent retail and office space. But that mix is not set in stone, Knutson said, with Dakota REIT officials willing to look at properties of all types, as long as they boast strong fundamentals.

Scott Pollock, executive director for capital markets with the Minneapolis office of Cushman & Wakefield|NorthMarq, helped Dakota REIT identify and acquire the three buildings.

Pollock said that the three buildings are strong one, and should be successful purchases for Dakota REIT.

“The buildings that Dakota REIT acquired are top-quality buildings in that market,” Pollock said. “The buildings have attracted a lot of name-brand tenants. They have great rent rolls, if you will. They are located conveniently off of Interstate-94. And the assets simply belong together. They make a good package.”

Avery Ticer, director of capital markets in the Minneapolis office of Cushman & Wakefield|NorthMarq also worked with Dakota REIT to help it locate the building in Plymouth. He said that the REIT’s decision to invest in this particular market was a sound one.

“That’s a good, strong market for office and industrial properties,” Ticer said. “It has great fundamentals. The building should bring the stable returns that Jim and his team are looking for. The building has a great location. It’s a strong performer, and it’s going to continue to perform strongly given the fundamentals in Plymouth and the overall market.”

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This entry was posted in industrial real estate, Minneapolis commercial real estate, Minnesota real estate, office, St. Paul commercial real estate and tagged , , , , , , , , , , , . Bookmark the permalink.

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