Cushman & Wakefield announced the firm has arranged the sale of a large portfolio of 601 recently developed single-family (“SFR”) build-to-rent (“BTR”) homes located throughout the Fargo/West Fargo/Moorhead MSA in the bordering states of North Dakota and Minnesota. The portfolio consists of excellent construction with Class A finishes, with homes ranging from three to five bedrooms. The portfolio was acquired by an affiliate of Christianson Companies. The seller was Meridian Mortgage, LLC.
The sales price was undisclosed but according to Cushman & Wakefield and multiple sources, the total purchase price ranked as the highest valued multifamily sale in North Dakota’s history. Additionally, the sales price is among the highest-ever valued for any commercial real estate property sold in the state.
Recently offered to the market for sale this past fall with strong historical occupancy and excellent lease trajectory, the mass SFR, BTR portfolio consists of high-quality homes located in the Fargo MSA. The city of Fargo is the largest city in North Dakota and the state’s economic engine. The city share’s a border along the Red River with Moorhead, Minnesota. The units are conveniently located and close to major employers including North Dakota State University and Sanford Health.
“This is an exceptional portfolio of multifamily assets featuring a special mix of desirable three-, four- and five-bedroom homes with an average age of 7.2 years and that are below current market rents. Per the Fargo-Moorhead Area Association of Realtors, home values in Fargo have averaged a robust 43% growth over the past decade. As homes values across the nation rise, and new supply is continually strained, this portfolio should see further asset appreciation,” said Kevin Phelan, Senior Director.
According to Cushman & Wakefield’s tracking, the Fargo, West Fargo and Moorhead MSA is experiencing solid growth with a current population of 266,262 that is projected to see substantial growth over the next few decades. The majority of the area’s residents are currently in the 20-34 age range. Furthermore, over the past five years the region has seen the creation of 9,000 new jobs, primarily in high growth industries such as technology and healthcare. West Fargo has 40,000 residents and has experienced an incredible 73% population growth in recent years.
“There are several significant commercial and civic-oriented projects, both public and private, currently underway in Fargo that are expected to drive further economic and population growth for the area. The city also houses the campus of one of the world’s largest tech companies and industry leaders,” added Phelan.
“The build-to-rent asset class is a favorable investment class for the multifamily sector. Demand for BTR assets in the Midwest and Mountain West regions and beyond remains strong, both from the investor standpoint and the renter pool. Build-to-rent properties provide an attractive and flexible option for renters seeking the feel of a home but may not yet be committed or able to afford purchasing a home,” closed Phelan.
