Real estate notebook: Eagan apartment sale adds to signs of record pace

An entity related to Manhattan-based Abacus Capital paid $18.3 million in cash for the 188-unit Colonial Village complex on Silver Bell Road in Eagan, according to a certificate of real estate value filed with Dakota County.

It's the firm's second apartment purchase in the Twin Cities metro area, which has been trampled by outside investors seeking rental properties.

In late March, Abacus paid $64 million for the Burlington, a 427-unit building near Energy Park Drive in St. Paul that was built in 1988, according to public records. That's nearly $150,000 per unit for the four three-story buildings and 17.3 acres of land. The seller was listed as Burlington Apartments LLC.

Colonial Village, the firm's most recent acquisition, includes a 13.3-acre site and four buildings that were built in 1972 at 1959 Silver Bell Road near Hwy. 77. The seller was Colonial Village LLC, which is related to Edina-based Sentinel Management Co.

Abacus did not respond to a request for comment.

With rent prices on the rise and average vacancy rates still below local and national norms, the Twin Cities area is still viewed by national investors as an attractive place to park money.

Apartment sales during the two previous years set records and 2016 is on track to do it again, according to Abe Appert, senior vice president with CBRE. In the first quarter alone, there's been $650 million to $700 million in sales. Appert expects total sales this year to top $1.2 billion.

Even so, that pales in comparison to what's happening in Denver, where sales have totaled more than $3 billion, and Kansas City, where they have totaled $1.5 billion.

With construction costs on the rise and the luxury market saturated in some areas, most apartment buyers today are shopping for Class B and C buildings that can be spruced up and repositioned to increase rents.