Crystal and Bloomington multifamily sites offer value-add

Editor’s note: On the Market is a regular feature from Finance & Commerce that highlights interesting commercial real estate that has recently been put up for sale. Let us know about CRE that’s on the market at [email protected].

Two campus-style suburban multifamily properties with significant value-add potential get the spotlight in this week’s On the Market.

First, we visit a 36-unit community near Crystal’s commercial core that has been with the same owner for going on 45 years. Then it’s off to Bloomington for a well-located, 244-unit property that’s had no trouble staying full over the years.

Krystal Kourt Apartments

Built in 1966 and last traded in the early 1980s, Krystal Kourt features three handsome brick buildings directly across from Broadway Park. The site is less than a mile from Crystal’s commercial epicenter at West Broadway and Bass Lake Road, within easy reach of a planned METRO Blue Line extension light rail station.

The property has two related selling points, listing broker Abe Roberts told Finance & Commerce: attentive long-term owners that have kept it in great shape, and a clear opportunity to add value through targeted updates.

It’s the same owner as Heritage Kourt, an Edina community of similar vintage featured in On the Market last month.

“It’s essentially an estate sale,” Roberts said. “Very well-maintained assets that are ripe for transfer of new ownership.”

The community is split evenly between one-bed, one-bath units with an average rent of $933/month and two-bed, two-bath units averaging $1,035/month.

The total rentable square footage is just shy of 30,000. The roofs are brand-new — replaced this year — while the workhorse boilers are original. Thirty-one surface parking spots complement 36 garage stalls. The listing describes a property that has “benefited from continuous capital investment” with plenty of potential for modern touches — and previews a call for offers on Oct. 22.

Address: 5930-5950 W. Broadway, Crystal

Type: Multifamily

Square Footage: 2.43 acres (36 units)

Asking Price: Not disclosed

Seller: Krystal Kourt, LLC (Hanover, MN)

Listing Broker: Abe Roberts, The Roberts Group / Marcus & Millichap

Southgate Apartments

Southgate Apartments shares some superficial similarities with Heritage Kourt, like two-story construction, brick cladding and spacious, well-maintained grounds. Like Heritage Kourt, it’s located close to a bustling commercial hub.

But at 244 units across nearly 15 acres, Southgate Apartments is of a totally different scale. It’s incredibly well-located too: a few minutes’ drive to the Mall of America, even closer to the American Boulevard commercial corridor and just the right distance from Minneapolis-St. Paul International Airport. The units are a mix of one- and two-bedrooms, which are in high demand as many Twin Cities employers transition back to hybrid or full in-person work.

With great fundamentals in place, value-add is the play here. Michel Commercial Real Estate, the listing broker, estimates average per-unit upside of $153/month based on recent comps in the area, which has seen several significant multifamily renovation projects since 2020. A move to a full ratio utility billing system — an increasingly popular method that better aligns tenants’ utility costs with actual usage — could offer further upside, they say.

Tight multifamily supply in the Bloomington/494 submarket means Southgate’s new owner should have little trouble keeping it full in the meantime. At last check, the community is 96% occupied. And those same supply constraints should translate to quick absorption of any unit updates, Michel says.

Address: 8100 12th Ave. S., Bloomington

Type: Multifamily

Square Footage: 14.95 acres (244 units)

Asking Price: Not disclosed

Owner: Southgate Ltd Partnership (St. Paul)

Listing Broker: Michel Commercial Real Estate