Berkadia sweeps $214 million in Midwest property run

In just the past eight weeks, Berkadia’s Midwest brokerage team has closed on $214.75 million in combined sales of fourteen properties.

“While overall activity in the multifamily investment sales space was down over 50 percent year-over-year, our Mid-Markets Group has remained busy with gross sales through the end of September of more than $725 million. We have taken an aggressive approach to assist those clients who needed to transact despite the difficult market conditions,” said Michael Sullivan, managing director of Berkadia’s Mid-Markets Group.

The properties include Oak Tree Square Apartments, Lakeside Village, Cold Storage Lofts, Citadel Suites and Apartments and Ames 6 Portfolio.

“The fourteen deals we’ve closed over the last eight weeks represent the last of those deals that we listed prior to the onset of the COVID-19 pandemic,” said Alex Blagojevich, senior managing director at Berkadia.

“When the full magnitude of the pandemic hit the U.S. in March, it reshuffled the market fundamentals of the entire multifamily sector, resulting in a disconnect between buyer and seller expectations. Overcoming this disconnect was our greatest hurdle to getting these deals closed, but we kept both sides communicating, and in the end, the average difference across all of those transactions between the final sales price and the price we quoted the seller was in the two-percent range,” Blagojevich said.

Transactions recently closed by the Berkadia Mid-Markets Group include:

·       Oak Tree Square Apartments, located at 12800 14th St. in Grandview, Mo. The 189-unit garden-style multifamily property was a Section 42 LIHTC affordable deal sold by Missouri-based Worcester Investments. Managing director John Schorgl of Berkadia’s Kansas City office secured financing for the acquisition on behalf of the buyer, a private syndicator out of Texas. The 10-year Freddie Mac loan includes three years of interest-only payments, and the deal closed on August 18, 2020.

·       Lakeside Village, a 75‐unit, garden‐style apartment community located in North Kansas City, Mo., was sold by Kansas-based Eighteen Capital Group to a private syndicator new to the Kansas City market. This off-market, direct sale was completed in just 45 days, as the buyer was rushed to complete this final piece of a larger 1031 exchange. Senior managing director Chris Blechschmidt and director Emily Stang of Berkadia’s Chicago office secured the acquisition financing. The deal closed on August 19, 2020.

·       Cold Storage Lofts is located at 500 E 3rd St. in the River Market area of Downtown Kansas City, Mo. Sold by a locally-based Kansas City firm, Maxus Properties, this 224-unit, adaptive reuse, midrise apartment property was ultimately purchased by a New York-based investor. After launching in late March, just weeks after the start of the shutdown, the Mid-Markets Group utilized the power of their extensive network and virtual touring to show the deal to more than 150 buyer groups. After receiving 10+ formal offers, they were able to get the deal across the finish line on September 23, 2020 at the agreed upon contract price, equating to a trailing 12-month cap rate in the low four percent range.

·       Citadel Suites and Apartments, located at 5113 N Brookline Ave. in Oklahoma City, Okla., was sold by a private family trust. The 114-unit garden-style multifamily property was purchased by a local, Kansas City-area firm after beating out more than 18 formal offers on the property, many of which had non-refundable money at execution of PSA. The deal closed on August 10, 2020.

·       Ames 6 Portfolio features six multifamily properties totaling 296-units, all located in Ames, Iowa. After launching the deal in early January, the Berkadia sales team pushed more than 150 interested buyer groups into the data room despite the oncoming pandemic and huge amount of uncertainty surrounding the student housing market. The portfolio was sold by Iowa-based Professional Property Management to a private, Chicago-based firm who closed the deal on September 7, 2020 at an in-place cap rate in the mid five percent range. Properties in the portfolio include: Colleen Crest, Delores Apartments, Gateway Hills, Maple Glen, Phoenix Apartments and River Burch.

The Berkadia Mid-Markets Group is led by Sullivan, Blagojevich and managing director, Ralph DePasquale. The team also includes senior directors Patrick Jordan and Chris Bruzas, directors Parker Stewart, Chris Gentry and Brett Meinzer and associate directors Dominic Martinez and Alex Malzone, who completed the sales on behalf of their respective sellers.

Separately, Berkadia’s Mid-Markets Group also recently completed the sale of Steeplechase on Maple, a 314-unit garden-style multifamily property located in Omaha, Neb., financed by Berkadia’s Blechschmidt and Stang; and the Wichita 5 Portfolio, a portfolio comprised of five multifamily properties throughout the Wichita, Kan. metro area.

KC's iconic 'Flashcube' building now open

The iconic “Flashcube” building at 720 Main Street in Kansas City, Mo., which previously sat vacant for nearly fifteen years, is now open for business.

The newly renovated, modern mixed-use building opened on August 14, 2020.

Worcester Investments partnered with MW Builders as the general contractor and Clockwork Architecture + Design to renovate the 220,000-SF space into 184 apartment units and 17,834 SF of office space on the first two floors.

The major piece and largest challenge of the project included replacing all the exterior glass that inspired the building’s nickname and landed the building on the National Register of Historic Places. The MW Builders team replaced more than 2,300 panes of glass -averaging twelve panes a day- to preserve the late-modern look and feel of the building.

“Flashcube has been a unique part of the downtown Kansas City skyline for a long time. It was exciting to see our crews step up to a new challenge on this project and preserve the building’s iconic look while giving the building a new purpose,” said Todd Winnerman, president of MW Builders.

Located alongside Kansas City’s Streetcar line, the new Flashcube Apartments will attract urban dwellers looking for easy access to public transit.

Plexpod, a coworking facility, takes up two floors and roughly 17,834 square feet of the building. Residents and other Plexpod members will have access to the building’s amenities, such as an indoor soccer field, rock climbing wall, indoor basketball court, yoga and fitness room, game room and pickleball courts.

Hawaiian dining concept launches in KC market with Belton location

Two brothers who helped operate Hawaiian Time, a quick casual
restaurant chain with nine Oregon locations, are rolling into the Kansas City market with a similar concept in Belton, the first of as many as a dozen planned for the metro area.

Cameron McNie and Tyler McNie will open Hawaiian Bros Island Grill, 1112 E. North Ave, in February. The brothers partnered with longtime friends and brothers Paul Worcester and Joel Worcester of Worcester Investments to purchase the 2,800-square foot former home of Long John Silver's.

"Our family purchased a single restaurant in 2003 from a Hawaiian family," Cameron McNie said. "We'd never been in the restaurant industry, but the business just exploded from that one location and we grew it throughout Oregon. After working for our family restaurant for many years, my brother and I wanted to branch off and do our own thing."  

The McNie brothers already are scouting a second metro-area location, touring 7-8 potential sites in November.

"We think this is an expandable concept. We have proven that in Oregon, so we're trying to move fast on additional locations," McNie said.

Hawaiian Bros will feature Hawaiian-inspired island décor and an all-fresh menu that includes a signature teriyaki chicken dish, Huli Huli Chicken. At about $8.50, the restaurant's traditional plate lunch includes a main portion of meat, two scoops of white rice, and a scoop of macaroni salad.

"This is a very similar yet different concept than Hawaiian Time. We have re-branded the look and feel to be our own as well as added some new takes on the menu while keeping the core of the traditional plate lunch intact," McNie said. "We've been doing this for 14 years and think we have a good idea of what works."

McNie said the ownership group chose to launch in Belton because of population growth in Belton and Raymore, as well as the ability to purchase the standalone building near Target and Home Depot at the intersection of 58 Highway and Towne Center Drive.  

"There are plenty of other successful establishments nearby, and the square footage is ideal for our operation," McNie said. "We feel our food and price point will be appealing to a wide demographic, allowing us to be successful wherever we are located. We believe the Midwest is ready for Hawaiian plate
lunch."

Hawaiian Bros. rendering courtesy: Clockwork Architecture