W
elltower Inc., a leading Real Estate Investment Trust based in Toledo, Ohio, has recently closed on a deal worth nearly $40 million for the Affinity at Eagan apartment complex in Eagan, Minnesota. This acquisition marks the second Affinity-branded property in the Twin Cities acquired by Welltower in just one week.

    The purchase price for the "active adult" community, located at 4000 Eagan Outlets Parkway, was $39.765 million, according to a certificate of real estate value made public on Monday. The seller is Affinity at Eagan LLC, an entity associated with the Inland Group of Spokane, Washington, which developed the property.

    The sale includes a $7.395 million down payment and a $32.37 million mortgage, with monthly payments of $130,354. A significant balloon payment of $28.7 million is due on November 1, 2030. The project's assessed value in 2024 is estimated at $40.425 million, as per Dakota County records.

    Completed in 2018, Affinity at Eagan is situated near the Twin Cities Premium Outlets on a 2.7-acre site bordered by Eagan Outlets Parkway, River Valley Way, Cedar Grove Parkway, and Nicols Road. The four-story building features amenities such as a theater, library, office and conference rooms, studio, fitness center, golf simulator, internet café, outdoor patio, and indoor pool, as per Eagle Building Co., the project's general contractor.

    Finance & Commerce reached out to Welltower and Inland for comments on Tuesday morning.

    The acquisition of the Eagan property follows Welltower's recent $32.9 million cash deal for the 174-unit Affinity at Ramsey building in Ramsey. The Ramsey complex is located at the southwest corner of Center Street and Ramsey Parkway, just a few blocks away from a Northstar commuter rail station. Both Ramsey and Eagan are "active adult" properties catering to residents aged 55 and above.

    In February 2024, Welltower announced that it was under contract to acquire a portfolio of 25 Affinity communities for $969 million. The portfolio comprises nearly 3,900 units, most of which are in the Pacific Northwest, according to Welltower's press release. Affinity Living Communities will continue to manage the portfolio, as per the release.

    The portfolio's per-unit cost of about $249,000 represents a significant discount compared to the replacement cost for a highly amenitized portfolio with an average age of less than eight years, as per the release.

    Darin Davidson, Affinity's president, said in the February 2024 press release, "In Welltower, we found a partner with shared values and forward thinking. The Welltower partnership will enable us to enhance and extend our ability to execute our mission of creating thriving communities in which our engaged residents live full and happy lives."

    Shankh Mitra, Welltower's CEO, stated, "Our Wellness Housing portfolio helps address the significant and growing unmet demand for wellness-focused rental housing for seniors. These communities provide thoughtful amenities and targeted social programming for empty nesters and active adults at moderate price points."

    Inland's active adult portfolio includes Affinity communities across the country. As of Tuesday morning, both the Eagan and Ramsey properties were still listed on Inland's website.

    Welltower invests in independent living, assisted living, and memory care communities, as per its website. Inland's website reveals that the company is actively developing and constructing projects specifically focused around income- and age-restricted multifamily housing across western and mid-west states.

    Jill Johnson, president and founder of Minneapolis-based Johnson Consulting Services, believes Welltower is a sophisticated player in the senior market. She wouldn't be surprised if the company starts looking for other acquisition candidates in the Twin Cities to expand its footprint there.

    "They are not rookies by any stretch of the imagination," Johnson said. "They understand the business of housing for older adults. There is a real difference between sophisticated folks like this and one-off developers looking for quick opportunities."