The local real estate market continues to heat up as a local firm sells off all of its Rochester properties to a North Dakota company for $72.5 million.
Bouquet Cos. sold its 393 Rochester rental units to Investors Real Estate Trustin four deals on March 22, according to state documents and Bouquet President Gregg Erickson.
"The capital markets for these type of assets is very strong right now," Erickson said. "It was a good opportunity,"
He leads Bouquet with parents John and Marcia Bouquet and his brother, Dirk Erickson.
"The properties have a high occupancy rate. We were fortunate. We have had very good, loyal tenants," Gregg Erickson said.
The four sales were for $37 million, $18.5 million, $12 million and $5 million for a total of $72.5 million. The Bouquet properties sold include Avalon Cove, Cascade Shores, Crystal Bay and French Creek. The properties were built between 1990 and 2010. They have one central leasing and management office.
In 2008, John Bouquet purchased the troubled and unfinished Cascade Shores development for $3.1 million, despite it being stalled since 2006. Bouquet's investment revived the project.
Despite the tough economic times in 2008, Bouquet said then that he saw potential in Cascade Shores.
"I've always been an optimist" he said in 2008. "Things change. That's the market."
A major change in the market has been IRET's growing interest in Rochester. Buying these apartments and town homes made sense for IRET, because they are all near the Grandeville at Cascade Lake housing community on Second Street Southwest. IRET purchased the 276-unit Grandeville in November 2015 for $56 million from LeCesse Development Corp.of Florida.
IRET long has been an active investor in Rochester. With the latest deal for the Bouquet properties It now owns 1,773 housing units in 14 properties, including Quarry Ridge, Olympik Village and Sunset Trail.
"The acquisition of this multifamily portfolio is a strong addition to our platform and solidifies our presence as the largest apartment owner and operator in the Rochester market," IRET President and CEO Tim Mihalick said in an announcement of the deal. "Rochester is a growing market with strong fundamentals and a healthy, diversified economic base, including the world-renowned Mayo Clinic, and we believe this acquisition creates the opportunity to generate attractive returns over time."
The $72.5 million total of last week's sale is the largest Rochester real estate deal so far this year in a very active market. IRET's purchase of Grandeville was Rochester's largest single sale in 2015.
The North Dakota firm previously announced that it is selling off its shopping centers to focus solely on housing properties.
In Rochester, IRET sold the Maplewood Square shopping center in northwest Rochester for $15 million in 2015. The center, anchored by Best Buy, Fareway Foods and Ashley Furniture, was purchased by SGO MN Maplewood LLC, of San Mateo, Calif. The sale was part of a larger deal that included 15 IRET commercial properties.