Minnesota Lawyer
Putting another square block of property in its real estate portfolio, the University of Minnesota continues to squirrel away land within an East Bank campus area that’s a hotbed of current and future construction projects.
In a two-part transaction, the university paid $18.3 million in cash for 11 residential properties on Huron Boulevard, Erie Street, Fulton Street and Essex Street, according to a certificate of real estate value that became public this week in Hennepin County.
CPM Development, based in Minneapolis, was the seller. CPM had acquired three of the properties — at 514, 520 and 524 Huron — for $7 million in cash from Babatunde Awoyinka, a Brooklyn Park-based seller, according to a separate CRV.
The ink was hardly dry on that deal before CPM turned around and sold the properties to the U of M as part of the $18.3 million transaction.
Richard Pfutzenreuter, chief financial officer at the U of M, said the U of M doesn’t have any immediate development plans for the site. When CPM approached the school with an offer to sell the land, it was simply too good of a deal to pass up, he said.
“It’s rare for the university to be able to purchase an entire square block,” Pfutzenreuter said. “It was available and we purchased it. Being as landlocked as we are, you don’t want to miss out on an opportunity to get an entire block.”
Most of the 18 properties are small multifamily buildings, with a combined taxable market value of about $4.9 million, according to Hennepin County property records.
CPM is tearing down the buildings on the properties and the U of M will take possession of the property as vacant land, which will be set aside for parking as an interim use, Pfutzenreuter said.
CPM officials weren’t immediately available for comment Wednesday.
The Minneapolis developer knows the area well. At 501 Huron Blvd. SE and 2510 Essex St. SE, across the street from the newly sold parcels, CPM is developing a five-story, 140-room DoubleTree by Hilton Hotel, as Finance & Commerce reported in July. CPM paid $4.32 million for the future hotel property, once the site of the former Everfresh Food building.
Previously, CPM wanted to build a 123-room hotel on the southwest corner of Essex and Huron streets, but the developer sold those properties — at 1014, 1018 and 1022 Essex St. SE — to the U of M for $6.61 million.
Finance & Commerce reported at the time that the deal could eventually grow to roughly $26 million in property sales covering the entire block.
The U of M has long been banking land in the area, keeping its options open for future development.
In June, the Board of Regents approved the acquisition of a nearly 5-acre site at 600 25th Ave. SE and 649 26th Ave. SE. for unspecified institutional uses. The U of M said it would pay $1.45 million for the property and reimburse the seller’s $578,000 cost of demolishing structures on the site.
In late 2013, the U of M partnered with United Properties to purchase a Days Inn next to TCF Bank Stadium.
The newly acquired properties are near the U of M’s $165 million, 332,000-square-foot Ambulatory Care Center, which is nearing completion at 909 Fulton St. SE, a site surrounded by Ontario, Essex and Erie streets.
CPM principal Nick Walton told Finance & Commerce in January 2014 that the Ambulatory Care Center was “a big driver” for a new hotel in the area.
“The idea is that with all the thousands of people going through the care center, and their family and friends, having a facility half a block away is going to serve a strong demand,” he said at the time.
