BIT Provides $37 million for Minneapolis Multifamily Development
The AFL-CIO Building Investment Trust (“BIT”) approved financing for the $37 million multi-family development project known as the Uptown Apartments. Located in Minneapolis, the project will deliver 216 new apartments. “We believe Uptown Apartments will prove to be a sound investment,” says Rinse A. Brink, Portfolio Manager for PNC Realty Investors, Inc. (“PRI”). “It is located in an in-fill market with high barriers to entry and should provide BIT participants with appropriate risk-adjusted returns.”
Construction on the Uptown Apartments is expected to begin within weeks, and the BIT is working closely with the Minneapolis Building and Construction Trades Council to assure the project meets the BIT’s union labor requirements. “The BIT remains committed to union job creation,” says Mike Stotz, President of the AFL-CIO Investment Trust Corporation. “It’s heartening when the BIT makes prudent investments that create much needed jobs for the men and women of the building trades.”
The BIT’s investment comes at a time when investors are showing a renewed confidence in the asset class and commercial real estate fundamentals are beginning to improve. Since the beginning of 2010, $104 million in new capital has been invested in the BIT with additional commitments totaling $124 million scheduled for entry in early 2011. In addition, BIT participants rescinded 25 redemption requests during the year, assisting in the retirement of the redemption queue.
The real estate capital markets appear to be thawing while vacancy rates for most real estate sectors appear to be peaking. PRI believes that well-selected and located multi-family projects scheduled for delivery in 2012-2013 timeframe will prove to be well timed due to positive demographic growth trends expected to increase demand and the relative lack of new projects scheduled to be completed should keep supply limited.
“With the additional capital support from our investors and our view of the current market data, we believe that investments in the development of well located multifamily projects will be prudent long-term investments,” says Kevin McCarthy, Managing Principal of PRI. “We are actively pursuing these types of opportunities and hope the Uptown Apartments is just the first of many such investments.”