Inland Real Estate Investment Corporation completed the approximately $28 million equity raise for Office Conversion Opportunity Zone, LLC, a private real estate investment vehicle structured to qualify as a Qualified Opportunity Fund and sponsored by an affiliate of Inland Investments. The offering has been fully subscribed and is now closed.
The Fund maintains an approximately 89% ownership interest in a 16-story building at 386 Wabasha St. North in downtown St. Paul, Minnesota, which is in a population census tract that has been designated as a “qualified opportunity zone,” or “QOZ,” pursuant to Internal Revenue Code.
The property is being redeveloped from an underutilized office building into a modern multifamily residential community consisting of 178 apartment units and approximately 2,338 square feet of street-level retail space. Upon completion, the community will be known as “The Stella.”
“The Fund strategy reflects our commitment to identifying high-quality investments that respond to evolving market dynamics, particularly as demand for traditional office space continues to shift,” said Matthew Fries, chief executive officer and president of Inland Investments. “The Stella represents a strategic repositioning of a historically significant property into a modern residential asset designed to meet growing demand for urban living while contributing to the continued revitalization of downtown St. Paul.”
The Stella is expected to offer residents a comprehensive amenity package, including a state-of-the-art fitness center, rooftop deck with grilling stations, spa room with outdoor jacuzzi, and clubhouse and lounge spaces. Apartment interiors are designed with contemporary finishes, including quartz or granite countertops, stainless steel appliances, in-unit washers and dryers, and nine-foot ceilings.
Located in the heart of downtown St. Paul, the property offers strong accessibility to regional transportation, including the light rail and Union Depot. It is also within proximity to major employment hubs, dining, entertainment and cultural amenities, with direct access to the Saint Paul Pedestrian Skyway System, a climate-controlled network that spans more than five miles and connects key destinations throughout downtown.
The redevelopment is being executed in partnership with Kaeding Development Group LLC as development partner, R.E.C., Inc. d/b/a Ron Clark Construction & Design as general contractor, and Bader Management, Inc. as property manager. The Fund represents the sixth project completed in partnership between Inland and Kaeding, with four of those projects involving either ground-up development or adaptive reuse. The project is further supported by historic tax credits and other financing structures contributing to the overall capitalization of the development.
Inland Investments specializes in offering public and private tax-advantaged, growth and income real estate solutions spanning virtually every sector of the commercial real estate market. Inland member companies have facilitated more than $56 billion in acquisitions since inception and currently manage a diverse real estate portfolio of approximately $16 billion.
