Sterling Management, a Fargo-based investment firm, has purchased the recently built Falcon Apartments in North Branch for $24.5 million, according to a press release from the property’s brokers. The sale was structured as a 1031 exchange.
The Falcon Apartments, developed by Kuepers Inc., feature 144 units across four stories and were completed in 2023. The property is located at 5385 385th Street in North Branch, roughly 47 miles from downtown Minneapolis.
Kuepers sold the property to free up capital for other projects, while its related management company, Prairie Lake Management, will continue overseeing operations at Falcon Apartments. The sale was arranged by Michel Commercial Real Estate, with Vice President Heidi Addo noting that Sterling offered an all-cash deal above the asking price, contingent on a quick closing.
The $24.5 million price equates to approximately $170,140 per unit, matching another Kuepers-built property, the Birch Grove Estate Apartments in Zimmerman, which also sold for $24.5 million. Addo explained that Sterling is currently executing a portfolio “reset,” moving out of older properties and investing in newer ones, a strategy increasingly common among multifamily owners.
Sterling Management’s holdings are primarily multifamily, with over 80% of its portfolio dedicated to this sector. About a third of its properties are in Minnesota, with half located in North Dakota. The firm recently sold the Courtyard Apartments in St. Louis Park for $18.35 million, highlighting its active approach in the Twin Cities metro and surrounding markets.
Addo emphasized that the buyer pool for properties outside the Twin Cities metro differs due to the need for investors willing to operate in tertiary markets. Despite this, demand for apartments in Chisago County remains strong, driven by limited supply and some of the state’s lowest vacancy rates.
Cap rates also vary between metro and outstate properties. Falcon Apartments closed with an approximate 6% cap rate, slightly higher than a 5.5% cap rate recorded for a comparable property in Blaine earlier this year.
The Falcon Apartments acquisition reinforces Sterling Management’s focus on expanding its portfolio in newer, high-demand multifamily properties, positioning the firm to capitalize on strong rental markets in Minnesota and North Dakota.
