1015 Lake Street

1015 W Lake St, Minneapolis, MN 55408
Strategy: Current Yield
Status: Current
Purchase Price: $2,600,000
Acquisition Date: 1/20/2009
SqFt: 6,500

1015 Lake Street is a Class A retail property located in the exclusive Uptown neighborhood of Minneapolis, MN, surrounded by national tenants and newly-built apartments.

Buildings in Uptown are very sought-after and often owned for decades by the same owners. 1015 Lake Street is one of few retail centers in Uptown with off-street parking for customers.

Before to the 2008 financial crisis, high-quality retail properties in this neighborhood were selling for 6.00% cap rates. But we acquired 1015 Lake Street at an 8.00% cap rate, aiming to hold the property long-term, or at least until cap rates normalized. Over time cap rates did return to the previous level, and we grew the rental income for tremendous value appreciation.

We declined an unsolicited offer to buy the property for $3.95M, a 52% increase in value creation since acquisition. It was apparent that we could have countered and pushed the sale price higher, but we elected to hold the asset given it’s a trophy asset with rare off-street parking in one of Minneapolis’s most desirable neighborhoods.