Kayne Anderson Real Estate ("KA Real Estate"), the real estate private equity arm of Kayne Anderson Capital Advisors, L.P., and Alatus, LLC ("Alatus"), announced today that they have closed the sale of The Berkman, a 350-unit, Class A, multifamily community in Rochester, Minnesota, to CBRE Investment Management, which made the investment on behalf of one of its separate account clients.
Located at 217 14th Ave S.W., The Berkman sits across the street from the Mayo Clinic's Saint Marys Campus, the nation's largest intensive care unit, and is less than one mile from the Mayo Clinic's downtown campus. According to Newsweek, Rochester's Mayo Clinic is currently ranked as the best hospital in the world. The community is a three-minute drive from Downtown Rochester's shops, salons, restaurants, breweries and employers and a five-minute drive from the Apache Mall. Additionally, the property is a 10-minute drive from Rochester International Airport and just over a one-hour drive from Minneapolis and St. Paul.
Both KA Real Estate and Alatus maintain a successful track record and forward-thinking approach to real estate and are committed to prioritizing and incorporating environmental, social and governance ("ESG") standards into their businesses. KA Real Estate and Alatus made significant investments that directly provide environmental and social benefits to the property and the local community, including installations of efficient electric heat pump technology and low-flow plumbing fixtures which create water usage efficiencies of more than 60% relative to standard plumbing features, and the usage of recycled content and sustainable and regional materials during the construction phase, minimizing construction waste and the carbon footprint of transporting materials.
The Berkman offers studios, one-, two- and three-bedroom units, along with six walk-up townhomes. Units feature nine-foot ceilings, oversized windows, stainless steel appliances, quartz countertops and full-size washers and dryers. Community amenities include a rooftop entertainment lounge, a rooftop pet lawn and spa, an outdoor pool with a sundeck, a clubroom, a sports suite with a golf simulator, a library with private studies, a fireplace-equipped television lounge and a fitness center. The property also includes 23,494 square feet of commercial space.
"We are so proud to be a part of this best-in-class sustainable development with Alatus that has been carefully curated with innovative design utilizing repurposed materials and amenity-rich common spaces for our tenants to enjoy," said David Selznick, Chief Investment Officer, KA Real Estate. "Our objective was to provide an ESG-oriented community to support the Mayo Clinic's staff, patients and overall Rochester resident base and we are thrilled to have accomplished that with The Berkman, which has outperformed in every way."
"Alatus set out on a mission to deliver a transformational project that served the community of Rochester and the Mayo Clinic," said Robert Lux, CEO, Alatus. "Thanks to the vision and dedication of our team and the strong partnership with the City of Rochester and the Destination Medical Center, I can confidently say that we achieved our goal in producing a landmark asset for the community."
Benjamin Green, Managing Director, Residential Transactions, at CBRE Investment Management, added: "The Berkman represented an opportunity to invest in a top-of-the-line residential asset that features a rare level of amenities and benefits for Downtown Rochester residents. We believe that this asset's proximity to the area's elite base of education, research and world-renowned medical institutions, combined with strong demographic fundamentals, will position this property as a quality asset that will capitalize on durable demand from 'Eds and Meds'."
JLL Capital Markets represented the sellers. Their Sales and Advisory team was led by Managing Directors Mox Gunderson, Josh Talberg and Dan Linnell, Senior Director Adam Haydon, Executive Managing Directors Matthew Lawton and Jon Geanakos and Senior Managing Director Jim Curtin.
About CBRE Investment Management
CBRE Investment Management is a leading global real assets investment management firm with $141.9 billion in assets under management* as of December 31, 2021, operating in more than 30 offices and 20 countries around the world. Through its investor-operator culture, the firm seeks to deliver sustainable investment solutions across real assets categories, geographies, risk profiles and execution formats so that its clients, people and communities thrive.
CBRE Investment Management is an independently operated affiliate of CBRE Group, Inc. (NYSE:CBRE), the world's largest commercial real estate services and investment firm (based on 2021 revenue). CBRE has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE Investment Management harnesses CBRE's data and market insights, investment sourcing and other resources for the benefit of its clients. For more information, please visit www.cbreim.com.
*Assets under management (AUM) refers to the fair market value of real assets-related investments with respect to which CBRE Investment Management provides, on a global basis, oversight, investment management services and other advice and which generally consist of investments in real assets; equity in funds and joint ventures; securities portfolios; operating companies and real assets-related loans. This AUM is intended principally to reflect the extent of CBRE Investment Management's presence in the global real assets market, and its calculation of AUM may differ from the calculations of other asset managers and from its calculation of regulatory assets under management for purposes of certain regulatory filings.
About Kayne Anderson Real Estate
Kayne Anderson Real Estate ("KA Real Estate") is a leading real estate private equity investor in medical office, seniors housing, off-campus student housing, multifamily housing and self-storage. KA Real Estate manages $14 billion of real estate AUM (as of 1/31/22) across opportunistic equity, core equity and real estate debt. KA Real Estate is part of Kayne Anderson Capital Advisors, L.P., a $32 billion alternative investment management firm (AUM as of 1/31/22) with more than 37 years of successful experience in the real estate, renewable and energy infrastructure, energy, credit, and growth capital sectors. For more information, visit https://kaynecapital.com/real-estate/.
About Alatus, LLC
Alatus was founded in 2005 with the goal of revitalizing communities through transformative real estate development. Through numerous, award-winning urban and suburban developments, the Alatus team brings more than 30 years of real estate planning, design, and construction experience to each project and proudly partners with clients and communities throughout the Upper Midwest. Alatus has participated in the development of some of the most influential residential properties in downtown Minneapolis including The Carlyle Condominiums and Grant Park Condominiums.
Their track record in producing first-class projects is proven by the success and longevity demonstrated in their portfolio. Alatus listens closely to local residents, stakeholders and cities to develop transformational projects that will enhance and revitalize the neighborhoods they are part of, and they leverage their extensive industry experience and prowess to deliver exemplary results. Alatus was recently named one of the most innovative development companies in Minnesota and it's most recently delivered project in Rochester, MN - Berkman Apartments - won numerous awards for best in class and state in addition to its recognition for environmental sustainability. The project represents the embodiment of the culture, community, and process that Alatus strives for in each project within every new community.