Nick Gustafson sold the 72-unit Cox multifamily portfolio in December 2020 for $5,812,000.
Gustafson listed the property in the first week of March 2020, days before the global pandemic began shutting down large swathes of the county. “We had a significant amount of interest in the property that first week of March, but investors hit the pause button on new deals for a month or two,” said Gustafson.
The seller and Gustafson agreed to let the dust clear and placed the properties on the open market in May.
U.S. investment real estate deal volume floundered in the second and third quarters. The Sioux Falls market reflected this trend until it not only recovered in the fourth quarter—it accelerated.
“Incredibly, Sioux Falls multifamily sales volume increased nearly 30% year-over-year in 2020. Political leadership kept South Dakota open for business, despite negative national media attention and arguably grim COVID-19 case and death rates per capita. Local and national investors felt confident to allocate capital in our market knowing multifamily tenants had the ability to continue working and paying rent.”
After placing the property on the market, Gustafson made hundreds of cold calls and reached out to past clients. Ultimately, Gustafson received significant interest in the multifamily portfolio netting nine total offers.
“Several of our offers came from out-of-state. Investors from Arizona, Minnesota and Nebraska had identified our market as a growing and vibrant place despite a global pandemic,” Gustafson said.
Gustafson’s client placed the property under contract with an Omaha, Nebraska investor group who closed the sale in 2020.
The veteran broker emphasized that the out-of-state investment interest in the 72-unit Cox multifamily portfolio is a good example of the strength of Sioux Falls’ investment real estate market.
“Sioux Falls is poised for an incredible decade of growth. The third largest U.S. publicly traded company is building the largest industrial building in state history, small businesses are recovering and thriving, and our population is growing by leaps and bounds,” Gustafson said. “Sioux Falls is continuing to be rewarded for its fair tax structure and family- and business-friendly attitude. There’s never been a better time to live and do business here.”