How An Off-Market Sale Delivered 137% Return on Equity 

In 2020, Roers Companies’ development team saw potential in land being marketed for sale in Lakeville, Minnesota. Despite the uncertainty brought on in the early days of the COVID-19 pandemic, our team moved forward and purchased the land for what would become Northlake Lofts. The opportunity was too good to pass up.

At the time, Lakeville was number one for home building growth and in the top five for population growth among Twin Cities suburbs. The area was under-served with very high demand for new rentals compared to the market average. With this in mind, we believed there would be pent-up demand similar to a previous Roers Cos. project — Maven — which was the first new apartment building in Burnsville, Minnesota in over a decade and had incredible leasing velocity the year prior.

The team’s assumption regarding Lakeville’s leasing interest was spot on. The modern design, prime location, and lack of comparable rental housing led to incredible demand, rental rate increases, and a swift lease-up. Northlake Lofts opened its doors with 57% of its 208 apartments leased in April 2022. Even more impressive was that the project completed ahead of schedule, so the leasing timeframe was condensed.

Shortly after completion, the Roers Cos. team was approached for an off-market sale that yielded the firm’s highest per-unit price and best investor returns to-date. Despite not yet reaching full occupancy at the time of the purchase agreement, the leasing velocity was clear, and the buyer moved forward.

Northlake Lofts sold in July of 2022, just two months after opening, for $60 million, which comes to $288,462 per unit. Investors saw a 49% average internal rate of return and a 137% average return on equity.

Project Completion: Spring 2022
% Leased at Opening: 57% (April 2022)
% Occupied in April: 30%

Sale Date: July 2022
% Leased at Sale: 96% (July 2022)
% Occupied in July: 85%

Project Cost: $41.5M
Sale Amount: $60M
Sale Price Per Unit: $288,462

Roers Cos. optimizes the performance of our projects through vertical integration, focusing on collaboration and alignment throughout the life of a project. From development through construction to lease-up and operations, to optimizing the property’s financial performance through refinance and sale opportunities, our teams work together to put our investors in the best financial position. Northlake Lofts is a prime example of our approach and timing yielding excellent results for investors.

Much like in the early days of our Lakeville development, our team believes today’s market uncertainty offers an upside for our multifamily projects in growing communities. If you have questions about what’s happening in the market or current investment opportunities with Roers Cos., please contact our investor relations team.

NO OFFER OF SECURITIES; DISCLOSURE OF INTERESTS: Under no circumstances should any material or information contained herein be used or considered as an offer to sell or a solicitation of any offer to buy an interest in any investment. Any such offer or solicitation will be made only by means of a confidential offering memorandum relating to the particular investment. Access to information about investments with projects undertaken by Roers Companies LLC, Roers Companies Project Holdings LLC, or any of their respective affiliates is limited to investors who qualify as accredited investors within the meaning of the Securities Act of 1933, as amended. Investment outcomes vary. Past success does not guarantee future results.