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Just Sold: OAK 36 sale shows interest in retail

by Paul Morgan

The OAK 36 Retail Center in Oak Park Heights, Minnesota, has been sold for $5.8 million. The center, which spans 12,279 square feet, was sold by the Driessen Group in Edina to an investor in Edina. The seller was represented by Matt Hazelton, Cory Villaume, and Bill Krebsbach, senior directors with the Minneapolis office of JLL.

Contrary to popular belief, strip malls are still attracting a lot of interest from buyers, according to Villaume. He stated in an email interview, “Retail fundamentals are possibly the best they have ever been. The lack of inventory in the market is still driving exceptional pricing for sellers, so at this point, we just need more inventory.”

OAK 36 is an appealing retail property due to its newer construction in 2017 and full occupancy with five strong tenants on triple-net leases. The tenants include Aspen Dental, AT&T Store, Potbelly Sandwiches, Shopko Optical, and Virginia Ho O. The center features four end caps, a drive-thru, and three patio spaces.

Located in Oak Park Heights along Highway 36, the property benefits from its proximity to major retailers such as Target, Menards, Lowe’s, Walmart, Petco, and Chipotle. The surrounding area within a 5-mile radius has an average household income of over $150,000.

The sale price equates to approximately $473.94 per square foot. The buyer of the property is Brookstone-Vanman LLC from Minnetonka, and the seller is Krueger Lane LLC from Edina. The transaction took place on September 22, 2023.

In another real estate transaction, The Portage, a 62-unit apartment building in Minneapolis, has been sold for $7.2 million to a private investor. This marks the property’s second sale of the year and its third sale since 2021.

Initially developed in 1951 as West Calhoun Apartments, The Portage is located at 3146 Bde Maka Ska Blvd. W., near the shore of Bde Maka Ska lake. The recent sale price amounts to $116,129 per unit.

According to the Finance & Commerce Apartment Sales Tracker, the average sales price per unit for apartments in the Twin Cities metro area is $152,719. The tracker has recorded the sale of 82,209 apartment units since August 31, 2011.

In 2021, Centerspace purchased the building from KMS Management for $8.25 million in a direct negotiation between the buyer and seller. Subsequently, Mann Apartments acquired the property from Centerspace for $6.65 million in March of this year. The sale was part of a larger portfolio transaction involving seven properties sold by Centerspace for almost $96 million.

The buyer of The Portage is Beachview Apartments from Minneapolis, while the seller is The Portage Leased Housing LLC from Wayzata. The sale was finalized on September 29, 2023.

Both the OAK 36 Retail Center and The Portage highlight the continued activity and interest in commercial and residential real estate in Minnesota. Despite the changing landscape of the retail industry, strip malls and apartments remain attractive investments for buyers, driven by strong retail fundamentals and demand for housing in desirable locations. With high-quality properties and favorable market conditions, sellers are achieving exceptional pricing, making it a lucrative time to be in the real estate market.

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