The largest reported sale of the year for the multi-family market closed on New Year’s Eve and included properties from Williston, Tioga and Stanley.
Energy Real Estate Solutions, ERES, announced the six-property sale on Tuesday, Jan. 7. The deal closed at $27.5 million on Dec. 31, and is listed as the state’s largest multi-family apartment complex sale by CoStar, a firm that tracks most of the largest real estate sales.
In addition to brokering the sale, ERES property management assumed full management and leasing responsibility for the six properties, which brings its Bakken property management portfolio to more than 5,000 total units.
Mike Elliot, founder and managing principal of Energy Real Estate Solutions, said the properties had multiple offers.
“The demand (in the Bakken) is relatively high,” he said. “There’s a lot of institutional capital, as well as high net worth and family companies looking to invest in all of the oil and gas markets, but specifically the Bakken.”
One reason Bakken deals are so highly sought, Elliot said, is that so many of its structures have been recently built, within the past 10 years or so.
“People also realize now that this oil and gas play isn’t going anywhere,” he said. “If nothing else, it’s probably going to get stronger. The infrastructure we have seen in the market over the last 10 years is pretty significant. It’s become a good place for people to live and work.”
Returns in the Bakken are higher than other markets, Elliot added.
“It is not without risk,” he said. “But the returns are higher than the primary markets where people are eking out a 5.5 percent return. These markets are getting much higher returns.”
Apartment complexes in the Bakken are still a good value. The New Year’s Eve apartments were sold below construction costs, Elliot said.
Four of the six properties sold are in Williston:
• Westridge Apartments, located at 3001 Harvest Hills Ave, Williston, ND 58801, with 96 units, four buildings, 123,360 rentable square feet and 7.22 acres.
• Roosevelt West Apartments, at 215 E 32nd St, Williston, ND 58801, with 94 units, two buildings, 99,548 rentable square feet and 5.03 acres.
• Eagle Point Apartments, at 2209 27th Ave W, Williston, ND 58801, with 24 units, one building, 25,456 rentable square feet and 0.66 acres.
• Williston Meadows, located at 2301 25th St W, Williston, ND 58801, with 24 units, one building, 26,448 rentable square feet and 1.43 acres.
There was also Dakota Apartments in Stanley, which has 32 units inn two buildings, with 35,264 rentable square feet and 2.09 acres and the Olson Apartments in Tioga, which has 84 units and seven buildings, with 85,260 rentable square feet on 3.4 acres.
In all, Eres sold $74.96 million in multifamily contracts in 2019, including the New Year’s Eve sale. Eres also deals in industrial and many other types of properties. It’s contracts for all types of assets totaled close to $185 million in 2019.
“Being 2019’s largest multifamily deal in western North Dakota is solid proof that private equity and institutional capital have a renewed focus on energy real estate investments,” Elliott said. “Energy markets, particularly those located in the Bakken, are so exciting due to
the incredible opportunities that exist here. Continually increasing oil production activity, a growing workforce and strong economic fundamentals have ensured that investing in these markets is a smart bet for continued returns.”