The Villages at Essex Park_Property for Sale

937 41st St NW, Rochester, MN, 55901, US

The Villages at Essex Park

Asset Description

Jones Lang LaSalle is pleased to present the offering of The Villages at Essex Park located in Rochester, Minnesota. This 288-unit community is comprised of 144 Market Rate Units and 144 Section 42 units income-restricted at 60% AMI, in its extended use period.

Advantageously situated in one of Minnesota's most rapidly expanding urban centers, the Property benefits from Rochester's growth, which is primarily driven by the world-renowned Mayo Clinic. The Mayo Clinic forms the nucleus of the innovative Destination Medical Center (DMC) initiative, which includes $5 billion in private investment expected over the next 20 years. The Villages at Essex Park exemplifies legacy quality through its strong community amenities, spacious unit sizes, and premium finishes. Furthermore, the asset is well-positioned for upside potential through either a mark-to-market strategy or a re-syndication business plan.

The Property benefits from a lucrative HUD loan with an attractive 2.18% interest rate. JLL invites offers from qualified investors interested in this prestigious investment opportunity. The expected closing date is set for Q3 2025.

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Attributes

Number of units

288

Occupancy

93%

Year built

1992

Year renovated

2013

Building area gross

26,894 m²

Land area gross

7.02 ha

Media

Investment Highlights

Robust Market Dynamics and Attractive Going-In Yield

The second phase of the asset benefits from a lucrative HUD loan with a 2.18% interest rate, enabling investors to achieve substantial cash-on-cash returns
Limited forward-looking supply pipeline will lead to strong absorption and rent growth for existing assets, as there are currently only 210 units under construction and 0 units proposed within a 5-mile radius of the subject property
Impressive asset-level historical occupancy of 94%+ since 2020 and strong third-party market rent projections of 3.16% through 2027
Cash flow boost through the State of Minnesota's 2025 class rate reduction on 4d units, representing an immediate 50% reduction in current taxes

Re-syndication and Value-Add Opportunity

Section 42 investment opportunity immediately eligible for tax credit re-syndication and mark-to-market following value-add execution supported by the immediate comp set
Mission opportunity supporting social and economic equality by providing housing to individuals below the 60% annual median income threshold
Significant capital invested by current management has maintained asset quality, including the addition of the clubhouse, pool, pond, and park in 2005

At the Heart of Medical Innovation Backed by Strong Investment Demographics

Strong Rochester demographics including an average household income of $120,000, 2.60% unemployment rate, and population growth of 15.43% within a 5-mile radius of the subject property.
Located within minutes of the Mayo Clinic, the global leader in the medical space. As part of the Destination Medical Center initiative there is north of $5 billion in private investment expected in the next 20 years within the city of Rochester.
Major employers in the region include Mayo Clinic, University of Minnesota Rochester, IBM, Crenlo, Benchmark Electronics, Olmsted County, and Olmsted Medical Center.