Property Details
Below Market Occupancy  NOI Growth 
Asset Profile
Value Add

Saint Anthony Industrial

Minneapolis, MN

Industrial Property

This deal is oversubscribed

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Midloch Investment Partners Minneapolis, MN
Midloch Investment Partners
  • IRR 16.5%-17.9%
  • Equity Multiple 1.56-1.61x
  • Hold Period 3Y
  • Minimum Investment $25K
  • Year 1 Cash on Cash 0%
  • Stabilized Cash on Cash 14.39% Y2
  • First Distribution May 2022
  • Distribution Frequency Monthly
  • Co-Investment 47% ($2.2M)
  • Preferred Return 9.25%
  • Investor Profit Share See Financials
  • Asset Profile Value Add
  • Loan-to-Value 67.3%
  • Current Occupancy 43%

About this Property

"Saint Anthony Industrial is a 153,928 SF last-mile industrial property located just north of downtown Minneapolis, MN. The property is situated on over 12 acres of land, inclusive of the desirable outdoor truck storage. The submarket is ~98% occupied, which has led to upward pressure on lease rates. The property owner, All Furniture, is selling the building and down-sizing their footprint, providing an opportunity to create value through lease-up. The excess land provides an opportunity to expand the outdoor truck storage and capitalize on the strong demand for outdoor truck storage."

-Andy Sinclair, Midloch Investment Partners

Address 63 St Anthony Pkwy
Square Footage 153,928 sq. ft.
Year Built 1955
Year Renovated 2012
Current Occupancy 43%1
Market Occupancy 98%
Current Average Rents $5 Warehouse (80%)
$11 Office (20%)
~ Sale Leaseback
Average Market Rents $5 Warehouse (80%)
$11 Office (20%)3
Purchase Price $12,000,000
Price/Sq. Ft. $77.96/Sq. Ft.2
Stabilized Loan to Value 54.9%
1The building is currently 100% occupied by All Furniture (also the Seller of the property), who will be downsizing to ~43% of the building upon acquisition. This creates an opportunity to increase income through leasing up the remaining portion of the building at market rents. The submarket is ~98% occupied, which shows the strong demand for functional warehouse space in the area. This building occupancy does not account for outdoor truck storage income. Please see the marketing materials, projections, and PPM for more details.
2The purchase price per square foot does not properly reflect the substantial outdoor truck storage revenue. Please see the financials and investment memorandum for more details.
3This transaction is a sale-leaseback at market rental rates. The Seller and future tenant, All Furniture, is downsizing to approximately 43% of the property. Please see the financials and investment memorandum for more details.

Top Questions

All answers are provided by the sponsor, Midloch Investment Partners, or its representatives.

 

Why are you buying this property?

Andy Sinclair, Midloch Investment Partners: "St. Anthony Industrial is a 153,928 SF last-mile industrial property located north of downtown Minneapolis, MN. The property was built in 1955, renovated in 2012, and boasts a mix of functional warehouse space (80%), fully built out modern office (20%), and highly desirable fenced in outdoor truck storage. The building is currently owned and 100% occupied by All Furniture, a Minneapolis-based relocation and furniture specialist. The owner of All Furniture is selling the building and down-sizing their footprint, providing an opportunity to create value through lease-up. The submarket is ~98% occupied which has led to upward pressure on lease rates. The property is situated on over 12 acres of land inclusive of the outdoor truck storage. The excess land provides an opportunity to expand the outdoor storage space and capitalize on the strong demand for outdoor truck storage. Midloch is acquiring the property with a Minneapolis-based operator, Fountain Real Estate Capital, who specialized in commercial ownership and leasing. This is the operator’s second asset in the immediate submarket."

 

What are the most important aspects of this investment opportunity for the investors?

Andy Sinclair, Midloch Investment Partners:

  • "Well-located Class B last-mile industrial property in a first ring submarket"
  • "Submarket is 98% occupied"
  • "Submarket provides access to Interstate 94 & Interstate 694 and immediate access to downtown via surface streets"
  • "Submarket has grown in desirability"
  • "Outdoor truck storage, with land for expansion"
  • "Further upside in expanding the truck court and leasing the remaining vacancies"
  • "Seller is remaining as a tenant at the property"

 

What is your investment strategy/business plan?

Andy Sinclair, Midloch Investment Partners: "4-STEP BUSINESS PLAN"

  1. "Expand Outdoor Storage: The property includes significant land which currently generates outdoor storage revenue of ~$150,000/year. Upon acquisition, the business plan projects to expand the outdoor storage to the south and west of its current location. This expansion of the outdoor storage will provide an opportunity to increase the storage revenue up to ~$200,000/year."
  2. "Lease Vacancies: The building is currently 100% occupied by All Furniture who will be downsizing to ~43% of the building upon acquisition. This creates an opportunity to increase income through leasing up the remaining portion of the building at market rents. The submarket is ~98% occupied, which provides an opportunity to create value through additional lease-up."
  3. "Cash Flow: The investors are projected to earn a 9.13% annualized cash yield with robust cash flow starting in year 2 after completion of the business plan."
  4. "Prepare for a Sale: Upon completing the business plan, the property’s stabilized cap rate is ~7.75% which compares favorably to current cap rates for stabilized industrial buildings of approximately 5.50% (Class A) and 6.25% (Class B)."

 

How has COVID-19 impacted your business plan?

Andy Sinclair, Midloch Investment Partners: "Industrial warehouse investments, both Class A and Class B, have grown in desirability during COVID-19 given their historical stability of occupancy and limited ongoing capital expenditures. This property offers prospective tenants quality and well located Class B warehouse space."

 

NOTE: All answers provided by the sponsor, Midloch Investment Partners, or its representatives.

Midloch retains approval and voting rights over all major decisions. Midloch's operating partner and Co-GP, Fountain Real Estate, has minority management rights and will oversee day-to-day management and leasing. Please see the PPM for more details.

About this Property

"Saint Anthony Industrial is a 153,928 SF last-mile industrial property located just north of downtown Minneapolis, MN. The property is situated on over 12 acres of land, inclusive of the desirable outdoor truck storage. The submarket is ~98% occupied, which has led to upward pressure on lease rates. The property owner, All Furniture, is selling the building and down-sizing their footprint, providing an opportunity to create value through lease-up. The excess land provides an opportunity to expand the outdoor truck storage and capitalize on the strong demand for outdoor truck storage."

-Andy Sinclair, Midloch Investment Partners

Address 63 St Anthony Pkwy
Square Footage 153,928 sq. ft.
Year Built 1955
Year Renovated 2012
Current Occupancy 43%1
Market Occupancy 98%
Current Average Rents $5 Warehouse (80%)
$11 Office (20%)
~ Sale Leaseback
Average Market Rents $5 Warehouse (80%)
$11 Office (20%)3
Purchase Price $12,000,000
Price/Sq. Ft. $77.96/Sq. Ft.2
Stabilized Loan to Value 54.9%
1The building is currently 100% occupied by All Furniture (also the Seller of the property), who will be downsizing to ~43% of the building upon acquisition. This creates an opportunity to increase income through leasing up the remaining portion of the building at market rents. The submarket is ~98% occupied, which shows the strong demand for functional warehouse space in the area. This building occupancy does not account for outdoor truck storage income. Please see the marketing materials, projections, and PPM for more details.
2The purchase price per square foot does not properly reflect the substantial outdoor truck storage revenue. Please see the financials and investment memorandum for more details.
3This transaction is a sale-leaseback at market rental rates. The Seller and future tenant, All Furniture, is downsizing to approximately 43% of the property. Please see the financials and investment memorandum for more details.

Top Questions

All answers are provided by the sponsor, Midloch Investment Partners, or its representatives.

 

Why are you buying this property?

Andy Sinclair, Midloch Investment Partners: "St. Anthony Industrial is a 153,928 SF last-mile industrial property located north of downtown Minneapolis, MN. The property was built in 1955, renovated in 2012, and boasts a mix of functional warehouse space (80%), fully built out modern office (20%), and highly desirable fenced in outdoor truck storage. The building is currently owned and 100% occupied by All Furniture, a Minneapolis-based relocation and furniture specialist. The owner of All Furniture is selling the building and down-sizing their footprint, providing an opportunity to create value through lease-up. The submarket is ~98% occupied which has led to upward pressure on lease rates. The property is situated on over 12 acres of land inclusive of the outdoor truck storage. The excess land provides an opportunity to expand the outdoor storage space and capitalize on the strong demand for outdoor truck storage. Midloch is acquiring the property with a Minneapolis-based operator, Fountain Real Estate Capital, who specialized in commercial ownership and leasing. This is the operator’s second asset in the immediate submarket."

 

What are the most important aspects of this investment opportunity for the investors?

Andy Sinclair, Midloch Investment Partners:

  • "Well-located Class B last-mile industrial property in a first ring submarket"
  • "Submarket is 98% occupied"
  • "Submarket provides access to Interstate 94 & Interstate 694 and immediate access to downtown via surface streets"
  • "Submarket has grown in desirability"
  • "Outdoor truck storage, with land for expansion"
  • "Further upside in expanding the truck court and leasing the remaining vacancies"
  • "Seller is remaining as a tenant at the property"

 

What is your investment strategy/business plan?

Andy Sinclair, Midloch Investment Partners: "4-STEP BUSINESS PLAN"

  1. "Expand Outdoor Storage: The property includes significant land which currently generates outdoor storage revenue of ~$150,000/year. Upon acquisition, the business plan projects to expand the outdoor storage to the south and west of its current location. This expansion of the outdoor storage will provide an opportunity to increase the storage revenue up to ~$200,000/year."
  2. "Lease Vacancies: The building is currently 100% occupied by All Furniture who will be downsizing to ~43% of the building upon acquisition. This creates an opportunity to increase income through leasing up the remaining portion of the building at market rents. The submarket is ~98% occupied, which provides an opportunity to create value through additional lease-up."
  3. "Cash Flow: The investors are projected to earn a 9.13% annualized cash yield with robust cash flow starting in year 2 after completion of the business plan."
  4. "Prepare for a Sale: Upon completing the business plan, the property’s stabilized cap rate is ~7.75% which compares favorably to current cap rates for stabilized industrial buildings of approximately 5.50% (Class A) and 6.25% (Class B)."

 

How has COVID-19 impacted your business plan?

Andy Sinclair, Midloch Investment Partners: "Industrial warehouse investments, both Class A and Class B, have grown in desirability during COVID-19 given their historical stability of occupancy and limited ongoing capital expenditures. This property offers prospective tenants quality and well located Class B warehouse space."

 

NOTE: All answers provided by the sponsor, Midloch Investment Partners, or its representatives.

Midloch retains approval and voting rights over all major decisions. Midloch's operating partner and Co-GP, Fountain Real Estate, has minority management rights and will oversee day-to-day management and leasing. Please see the PPM for more details.

Offered By

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Assets Under
Management

Currently
$416MM 30+ assets
Exited
$180MM 10+ assets
Portfolio LTV
59.9%  
Historical
Realized Returns

Total IRR
48.9%  
Equity Multiple
1.92x  
Annual Cash
N/R  
Years Of
Experience

As Principals
30+ years  
In Business
2 years  
Size
33 Staff * Dedicated investor relations
* All information is reported by Midloch Investment Partners as of 6/18/2020.
Assets Under
Management

Currently
$416MM 30+ assets
Exited
$180MM 10+ assets
Portfolio LTV
59.9%  
Historical
Returns

Total IRR
48.9%  
Equity Multiple
1.92x  
Annual Cash
N/R  
Years Of
Experience

As Principals
30+ years  
In Business
2 years  
Size
33 Staff * Dedicated investor relations
* All information is reported by Midloch Investment Partners as of 6/18/2020.

Financials

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Offering Financial

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Diligence Preview

Location Details

Minneapolis, MN

Andy Sinclair, Midloch Investment Partners:

"Last Mile Industrial Building in a First Ring Submarket: The property is located ~3.5 miles north of downtown on the east side of the Mississippi River in the Minneapolis industrial submarket. The submarket is one of the largest in the Twin Cities at over 22.9 million square feet. Despite its scale, the submarket has sustained ~98% occupancy with the expectation of tight vacancy going forward. Inventory in the submarket has contracted over the past 10 years as demolitions have outpaced new construction. There is presently no new construction underway in the immediate submarket. The property provides convenient access to I-94 and I-694."

Documents

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Offering Agreement Documents

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