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Berkman tower sold for $187.6 million

The 13-story Berkman tower, which opened in 2020, features 277 apartments, a 73-room hotel, and street-level commercial space. It stands a few hundred feet away from Mayo Clinic’s Saint Marys Hospital.

The Berkman
The Berkman tower on Monday, April 11, 2022, in Rochester. It was sold for $187.6 million on April 5.
Joe Ahlquist / Post Bulletin
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ROCHESTER — A 13-story tower in the shadow of Mayo Clinic’s Saint Marys Hospital recently sold for $187.6 million, less than two years after it opened.

The Berkman, at 217 14th Ave. SW, features 277 apartments, a 73-room hotel and street-level commercial space. It stands a few hundred feet away from Saint Marys and across Second Street Southwest from the Courtyard By Marriott and Homewood Suites hotels.

Lux bob.jpg
Bob Lux.
Contributed

Twin Cities developer Alatus spearheaded the creation of The Berkman, which opened in June 2020. Knickerbocker Berkman LLC, which is owned by CBRE Investment Management of Boston, purchased the tower and related townhomes on 2.77 acres in a contract for deed deal on April 5, 2022.

Florida-based Rochester MN Properties, LLC, which is owned by Alatus and Kayne Anderson Real Estate sold the property, which cost an estimated $115 million to build.

Bob Lux, Alatus founder and principal, is listed as the manager of Rochester MN Properties. Knickerbocker Berkman LLC paid the full $187.6 million at closing.

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Olmsted County estimated the total market value of The Berkman property at $162.5 million for 2022-2023.

This project was first announced in May 2016. Alatus partnered with Rochester developers Ed and Nick Pompeian as well as Bob Sexton in the early days of mapping out the project. The city of Rochester approved the project to receive $10.5 million in tax increment financing.

In August 2017, Alatus took control of The Brentwood on 2nd hotel (formerly known as the Blondell ) and the Ray-Mar Motel that stood on that corner. The old hotels were demolished in late fall of that year.

It was named after Daisy Louis Berkman Plummer , who was the wife of legendary Mayo Clinic physician Dr. Henry Plummer. The couple’s home, the Plummer house, is a historic Rochester site.

This is the largest sale in Olmsted County in 2022 so far.

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The next big ticket deal was the $67.3 million purchase of Waters on Mayowood in February. Inland Real Estate Group of Cos. purchased the senior living complex at 827 Mayowood Road SW in three transactions of $53.06 million, $7.30 million and $7.02 million on Feb. 7.

The biggest dollar figure in an Olmsted County real estate transaction in recent memory is $230 million. That is what the investors led by Wisconsin hospital executive Javon Bea paid for the Kahler hotels portfolio in 2013. That deal included the Kahler Grand, the Kahler Inn & Suites, the Marriott Rochester at Mayo Clinic and the Residence Inn.

Jeff Kiger tracks business action in Rochester and southeastern Minnesota every day in "Heard on the Street." Send tips to jkiger@postbulletin.com or via Twitter to @whereskiger . You can call him at 507-285-7798.

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Heard Around Rochester - Jeff Kiger.png

Jeff Kiger writes a daily column, "Heard Around Rochester," in addition to writing articles about local businesses, Mayo Clinic, IBM, Hormel Foods, Crenlo and others. He has worked in Rochester for the Post Bulletin since 1999. Send tips to jkiger@postbulletin.com or via Twitter to @whereskiger . You can call him at 507-285-7798.
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