Institutional Property Advisors (IPA), a multi-family brokerage division of Marcus & Millichap serving the needs of institutional and major private investors, recently arranged the sale of the University Technology Enterprise Center (UTEC), a 180,000-square-foot business incubation center on the University of Minnesota campus. The asset, which will be converted to student housing, brought a sales price of $12.9 million, or approximately $82 a square foot.
Peter Katz, an executive director of IPA, and Michael Ahles, an associate in Marcus & Millichap’s Minneapolis office, secured the exclusive listing to market the property on behalf of the seller, Dave Jasper. Katz and Ahles also represented the buyer, Chicago’s GEM Capital.
“The student housing market did relatively well in 2012, partially due to a slow economic recovery that drove many workers into the student pool,” says Katz. “Once converted to state-of-the-art student housing, this asset should see a steady stream of residents, and the continuing recovery should allow for a lift in rental rates.”
“The building was 90 years old and I was 75 years old, so the pressure to sell was high,” jokes Jasper. “I realized that the time had come for both of us to let the younger generation take the property to the next level.”
The asset will be revamped to provide 336 units (962 beds) of student housing with about 40,000 square feet of first-floor retail. The plan calls for five separate buildings that range from four to six stories. They would include one- and two-bedroom apartments and some three- and four-bedroom units in two-story townhome-style units connected with second-floor walkways. Planned amenities include a publicly available open-plaza area, a 20,000-square-foot courtyard, a green roof and 400 parking spaces.
Jasper and his team launched UTEC in 1986 to offer new and growing businesses a high-energy alternative to typical office buildings. Through the years, many start-ups have achieved momentum at UTEC before outgrowing it and relocating.
