Weidner Apartment Homes on buying spree in Twin Cities

Higher interest rates are stifling commercial real estate values — and sales — but a West Coast investor is still on a buying spree in the Twin Cities.

Kirkland, Wash.-based Weidner Apartment Homes has spent more than $250 million on apartment buildings in Minneapolis so far this year. Last week, the company paid $111 million for eight apartment buildings in the Uptown neighborhood of Minneapolis that have a combined estimated market value of about $163 million.

That deal includes a pair of mixed-use buildings formerly known as The Elan and The Miles Apartments situated on three blocks along the Midtown Greenway, a 5.5-mile bike and pedestrian trail built on a former rail bed.

Weidner merged the communities and renamed the 590-unit property Inspire Apartments. That multi-building complex, which includes 910 square feet of retail space, is two blocks north of West Lake Street

Weidner’s Uptown portfolio now includes 918 apartments, including the nearby Daymark Uptown Apartments, showing the company is deeply invested in the Twin Cities.

Earlier this month, Weidner paid $70 million cash for the Nic on Fifth, a 253-unit luxury apartment tower in downtown Minneapolis. That building has an estimated market value of $87.5 million.

And in June, the company paid $74 million for the 36-story LPM Apartment tower near Loring Park, according to public records. That sale was in line with the estimated market value of the property.

Through the past several years, Weidner has made significant investments in both new and existing rental buildings in the Twin Cities. In addition to several acquisitions and new builds, the company is partnering with Ryan Companies on Fourth & Park, a 25-story apartment tower by U.S. Bank Stadium that’s nearing completion.

Weidner’s investments come at a time when sales — and prices — for commercial buildings is declining, especially in urban areas across the country. Though apartment vacancy rates in the Twin Cities are generally more favorable to building owners, and rents in most areas are stable or on the rise, apartment values have softened or are declining.

During the pandemic, apartment values in many areas rose to record highs. But with interest rates now higher and financing more difficult to obtain, investors no longer have the buyer power — or confidence — they had just a year or two ago.

MSCI Real Estate, which tracks commercial prices, said apartment prices nationwide during April declined 12.1% from the previous year with prices steadily declining month-over-month.

CBRE’s Ted Abramson, who represented the seller of Nic on Fifth, said the building was about 93% occupied and highly appealing to prospective buyers, garnering multiple offers. He said the Twin Cities remains an attractive place for investors because the rent-to-income ratio makes it one of the most affordable in the nation.

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