Dive Brief:
- Centerspace is marketing its entire five-community portfolio in the Saint Cloud, Minnesota, region for sale, and several properties from its Minneapolis portfolio are on the block, according to a news release.
- The Minneapolis-based apartment REIT is also adding to its portfolio. In late May, it officially entered Salt Lake City, Utah, with the purchase of Sugarmont, a 341-unit property located in the Sugar House submarket with walkable access to multiple retail, dining and recreational offerings, for $149 million. The property was built in 2021.
- Centerspace also signed an agreement to acquire a 420-unit community in Fort Collins, Colorado, for $132 million, with closing anticipated in mid-June. The REIT will assume approximately $76 million of long-term, below-market-rate mortgage debt.
Dive Insight:
Centerspace owns 72 properties, consisting of 13,353 homes, in Colorado, Minnesota, Montana, Nebraska, North Dakota, South Dakota and Utah.
By moving into Salt Lake City and expanding in Fort Collins, Centerspace continues to evolve as a multifamily REIT focused on the Midwest and Mountain West.
The firm is attracted to Salt Lake City's economic base of high-tech, finance, healthcare and education jobs and easy access to plentiful natural amenities, including the nearby Wasatch Mountain range.
“The expansion into the Salt Lake City market furthers our scale in our target geographic exposure while improving our portfolio quality and enhancing our growth profile,” Centerspace President and CEO Anne Olson said in the news release.
Centerspace Senior Vice President of Investments and Capital Markets Grant Campbell said the REIT likes the long-term fundamentals of the Mountain West. “We're going to continue to focus on ways where we can enhance the differentiated offering that we can provide in that region,” he said on the REIT’s first-quarter earnings call in May.
Campbell said Centerspace was focused on acquisitions with “attractive embedded financing.”
“It could be potential mezz executions, harder to make development math pencil today, but we continue to have those conversations,” he said. “We're also talking to folks about potential mezz executions on recaps of existing assets.”
To increase financial flexibility, Centerspace exercised the accordion feature of its existing line of credit, expanding the borrowing capacity by $150 million to $400 million.
“We have fortified our balance sheet, enhanced our capital positioning and we'll continue evaluating a variety of new investment opportunities to advance our strategic plan,” Campbell said.
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