Dakota REIT Expands Into Twin Cities

MINNEAPOLIS—Dakota REIT primarily owns commercial real estate in the Fargo, ND, metropolitan area, but like an increasing number of investors, it can't resist the lure of the Minneapolis region, which has one of the most robust economies in the US.

In the past few months, Dakota REIT, which has more than $300 million in commercial real estate holdings, has acquired three buildings in the Twin Cities area totaling 115,000 square feet. Cushman & Wakefield | NorthMarq assisted in each transaction and will also oversee the properties on behalf of Dakota REIT.

“We look for good properties in good locations that can be managed well, and the Minneapolis-St. Paul market provides that,” says Jim Knutson, executive vice president of Dakota REIT.

The state already has one of the highest labor participation rates in the nation at 70.8%, and the total employment figures are still growing. Of the 11 major industry sectors tracked by DTZ, nine have had positive job additions in the past 12 months. And the Minnesota unemployment rate sits at about 3.6%, well below the national average.

The industrial sector is one of the big engines of growth for the Twin Cities and Dakota REIT gained a foothold here by buying Plymouth 6-61, a 45,000 square foot industrial building in suburban Plymouth. The sector absorbed 500,000 square feet in the second quarter and year-to-date has taken 1,367,000 square feet, according to a recent study, also by DTZ. This is roughly the same amount absorbed in all of 2014. And the overall vacancy rate has dropped to 9.3%, the lowest level the metro area has seen in a decade.

Dakota REIT has also acquired two suburban office properties here. The acquisitions include:
• Eagle Point Office Center III, a two-story, 40,000 square foot office building in suburban Lake Elmo.
• Eagle Point Office Center II, a single-story, 30,000 square foot office building, also in Lake Elmo.

The Cushman & Wakefield | NorthMarq capital markets group of Scott Pollock, Terry Kingston, Tom O'Brien and Avery Ticer helped negotiate each of the purchases.

“We've been appreciative of the ability to grow in our service offerings with Dakota REIT as they grow their portfolio in the Twin Cities,” says Rob Loftus, senior vice president and regional director – property management for C&W.