CATEGORIES | Debt | Equity | Financial Advisory | Investments | Multifamily | Student Housing
FIDES Capital Partners, LLC (“FIDES”) announces its fifth joint venture with a high-net-worth family office on the acquisition of a Minneapolis urban apartment portfolio with a total capitalization of $40.0+ million. The 11-property portfolio is concentrated in Uptown and Downtown Minneapolis. FIDES was responsible for sourcing, formulating the asset plan, underwriting and financing the transaction. FIDES is joint venturing with CPM Property Management on this acquisition to provide local property management and market expertise.
“We’ve been working to penetrate the Minneapolis market for the past two years due to the city’s vibrant economy. When this offering hit the market in May, it was clearly the ideal opportunity,” said Gregg Handrich of FIDES. “The portfolio is primarily located in the highly desirable Uptown and Loring Park areas of downtown Minneapolis and provides an instant multifamily platform in that city. The previous owner owned the properties for many years and took very good care of these older vintage-style buildings. But what made the deal extremely appealing was the fact that the prior owner did not invest in unit interiors and kept rents below market to obtain above market occupancy.”
Handrich continued, “The new construction taking place in these sub-markets achieves rental rates that are approximately 75% higher than older vintage product. We are planning to invest capital to upgrade the unit interiors, exteriors, and common areas of the assets as well as a complete marketing overhaul. The properties, which were built in the 1920’s, have so much character and charm. These qualities just need an updated marketing plan. Currently, residents only have two options in Uptown: brand new residences or older, outdated buildings. We believe there is an unfilled market to provide an updated classic urban product at pricing which is still substantially below the new product. Residents want both the location and the charm at a reasonable price”.
FIDES will asset management the portfolio and oversee the capital upgrade program. FIDES partnered with CPM Property Management who is a local apartment management company based in Uptown that provides a strong and very capable local partner. “We felt it was important to have a local partner for our initial investment in Minneapolis. After interviewing a number of local groups, it was clear that CPM was a great personality fit with a strong presence right in the heart of this portfolio. CPM is a dynamic and very competent partner who we envision partnering with on other opportunities as well,” concluded Handrich.