Marcus & Millichap is pleased to present the opportunity to acquire the Rees Associates Inc. Portfolio located at 1800 and 1918 Southwest 2nd Street in Des Moines, Iowa, occupied by the owner Rees Associates Inc. Zoned as mixed-use flexible (DXR), this sale is ideal for multi-family and retail redevelopment in association with public and private plans to revitalize the downtown riverfront area. Upon the sale of the property, Rees Associates Inc. plans to execute a one-year triple-net leaseback with two one-year options, allowing investors to generate cash flow while planning for redevelopment.
The subject property consists of approximately 7.85 acres of land and currently features two industrial properties. An additional 1.07 acres on the lot is currently being acquired by the owner and will be included in the land offering. Located along Racoon River near the convergence of the Des Moines River, the property is primely situated within walking distance to the Stadium and Market districts, displaying views of downtown Des Moines. Major redevelopment plans are underway to help cultivate this area as an arts and entertainment district, with the addition of a riverfront park, soccer stadium, and a fully connected multi-purpose green space that will encircle the downtown area known as the “green ring.”
The subject portfolio is situated in the McKinley School-Columbus Park submarket, containing just 634 multi-family units. Going into the second quarter of 2023, the occupancy rate stood at 94.8 percent. While annual rent growth has slowed to 3.9 percent, the effective rent reached $1,090 per month. There are currently no multi-family properties under construction, providing an opportunity for new developments. The portfolio is also a part of the much larger South submarket with 4.7 million square feet of retail space. During Q2 2023, the vacancy rate was 6.6 percent with rents rising 1.2 percent year-over-year (CoStar).
Located on the Des Moines River, Des Moines is a thriving city that serves as the capital of the state of Iowa. The metro area is home to a population of about 688,000 peopled, including over 214,000 residing within city limits. With a median household income more than 6 percent above the national average, metro Des Moines is an attractive location for businesses and individuals alike. Historically, Des Moines’ economy has been anchored by agriculture and remains a top producer of corn, soybeans, pork, and eggs. John Deere and Corteva Agri-science are major employers with more than 5,000 workers combined. Named the third-largest “insurance capital” of the world, Des Moines is a major center of the U.S. insurance industry, with many insurance companies headquartered in the city, including the Principal Financial Group and Wellmark Blue Cross Blue Shield. Des Moines is perhaps most popular for its role in U.S. presidential politics, serving as the host of the first caucuses of the presidential primary cycle (Marcus & Millichap, Wikipedia).
BROKER OF RECORD
Jon Ruzicka
Iowa Broker of Record
1601 Utica Avenue South, Suite 301
Minneapolis, MN 55416
Tel: (952) 852-9700
Jon.Ruzicka2@MarcusMillichap.com
License #: B63379000
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, express or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2023 Marcus & Millichap. All rights reserved. (Activity ID: ZAE0370320)
