Frank Jermusek gives information about why the Twin Cities are great areas to invest in when it comes to commercial real estate.

1. T W I N C I T I E S C O M M E R C I A L R E A L
E S TAT E N E W SB Y F R A N K J E R M U S E K

2. • The Twin Cities have become an increasingly popular location
for commercial real estate investors, especially for those from
out-of-state.

3. • Though many REITs,
pension funds, private
equity firms, high-net-
worth individuals, and
institutional groups are
known for buying
properties on the
coastlines throughout the
economic recovery, the
twin cities are seen as a
great alternative that can
result in large profits for
investors.

4. • According to a recent
article published by the
Star Tribune, “commercial
real estate investors who
come here are realizing
higher yields than more
expensive top-tier markets
like New York or Los
Angeles,” (Twin Cities
Commercial Real Estate
Draws Out-of-State,
Foreign Dollars).

5. • In addition, the ratio between the net operating income produced
by an asset and the original purchase price is significantly higher in
the Twin Cities (6%) in comparison to coastal properties rates for
cities like San Francisco (3.5%), for example.

6. • Although the Twin Cities are marked as second-tier investment
cities, the ability to earn returns from properties purchases in the
Twin Cities is far greater than those coastal markets.

7. • According to the Star Tribune:
• “Groups with capital ‘first prefer the gateway cities, but
when they’re priced out of those markets, and their ability
to earn appropriate returns goes away, they’ll check into
markets in second tier-cities, and we would fall into that
category,’ said Scott Pollock, executive director of
Cushman & Wakefield/NorthMarq’s Capital Markets
Group. ‘You have to be patient in this market, and capital
is not always in abundance, but you can see better
returns in the heartland than on the coasts,’” (Twin Cities
Commercial Real Estate Draws Out-of-State, Foreign
Dollars).

8. • That being said,
many corporate
companies have
been seen investing
in commercial
properties in the
Twin-Cities area.

9. • In recent news, an
office deal was made
between New York-
based Goldman Sachs
and the TractorWorks
Building and parking
ramp, which sold for
$54.8 million.
• Goldman Sachs is one
of the country’s largest
and most well-known
institutional investors,
who bought the
property.

10. • Because of Goldman Sachs’ recent investment, many smaller-
scale companies will likely follow their lead in investing
commercially in the Twin Cities, particularly in the downtown
Minneapolis central business district.

11. • For more
information
about recent
commercial
investment
deals within the
Twin Cities,
read this article
published by
the Star
Tribune.