On the Market: Edina apartments, retail center

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].

This week, On the Market dives deep into Edina. First, we check out a 33-unit multifamily community that meets the textbook definition of “value-add opportunity.” Then it’s over to Pentagon Village, where a two-building retail center offers a turnkey cashflow opportunity in a prime location.

Heritage Kourt Apartments

For the first time since the heyday of hair metal, Heritage Kourt Apartments is on the market. The 1960s-vintage community has 33 apartments, split between 27 one-bed/one-bath and six two-bed/one-bath units across three roughly equal-sized buildings. Each unit has its own garage space, according to the listing.

Heritage Kourt is well-located near the Highway 62/Xerxes Avenue interchange, not far from Southdale Hospital. The prime spot is driving early interest in the property, said Abe Roberts, listing broker with the Roberts Group at Marcus & Millichap.

“We had a ton of interest in the first 24 hours, as expected for this kind of location,” Roberts said.

That’s in spite of — or maybe because of — the fact that Heritage Kourt is a clear value-add play. The property has been in the same hands for about 40 years and has fantastic bones, including vintage hardwood floors.

Though Roberts can’t say enough good things about the management team, it hasn’t had a top-to-bottom renovation in decades. Two of the three boilers are original and the roofs are going on 30 years old, according to the listing. New kitchen fixtures and other cosmetic updates, too, could add several hundred dollars in rent value per unit and help bring the property up to market, Roberts said.

Address: 3105-3117 Heritage Drive, Edina

Type: Multifamily

Square Footage: 24,300 square feet (rentable)

Asking Price: Not disclosed

Seller: Heritage Kourt, LLC (Edina)

Listing Broker: Abe Roberts, Marcus & Milichap

Pentagon Village retail

For buyers not particularly interested in a value-add multifamily play, the turnkey retail and flexspace opportunity within the 13-acre Pentagon Village redevelopment may beckon instead.

Built in 2020, this two-building, 100% occupied retail center is also very well located just northwest of the Highway 100/Interstate 494 interchange. Its 7,399 square-foot single-tenant building is occupied by The Reserve, the local coworking and flexspace outfit popular with remote teams and independent entrepreneurs. The other building, spanning 4,401 square feet, is home to three fast-casual eateries: Jersey Mike’s Subs, MyBurger and Atomic Wings.

Needless to say, the uses complement one another. Unusual for a fully occupied, nearly new retail center in one of the Twin Cities’ wealthiest ZIP codes and “top retail trade areas,” this particular retail center offers some room for a new owner to run, said Amy Senn, listing broker with Mid-America Real Estate Group.

“Even though it’s newer construction, rents are still on the lower side compared to the market, leaving plenty of upside for future growth,” Senn said.

Naturally, the newish build means “minimal future capital expenses” and a still-active roof warranty, Senn added. The multitenant building has curb appeal to spare, too, with oversized windows, clean exterior lines and a covered outdoor seating area accessible from the MyBurger pad. A smaller sidewalk cafe section fronts the unit occupied by Jersey Mike’s.

Address: 4951 West 77th St., Edina

Type: Retail

Square Footage: 11,800 square feet

Asking Price: $6.4 million

Owner: Pentagon Retail, LLC (Victoria)

Listing Broker: Amy Senn, Bryce Thompson & Joe Girardi, Mid-America Real Estate Group