ECG News Archives - Ernst Capital Group

ECG News, Uncategorized

May 20, 2026

Opportunity zone developments address housing need, bring investor benefits

Call it a classic win-win.

An underdeveloped or underutilized area matures into new or improved housing. At the same time, the investors who help make it possible benefit. That’s the outcome offered by qualified opportunity zones — designated areas created through the 2017 federal Tax Cuts and Jobs Act to encourage long-term investment in economically distressed census tracts. The program recently was made permanent under federal legislation, allowing for ongoing use as a development tool.

“We’ve approached opportunity zone investing by first making sure what we pursue would be a successful project on its own,” said Chris Daugaard, a partner in Ernst Capital Group. “Tax policy can change outside of our control, but if we can have a successful project and have it be located in an opportunity zone, that’s definitely the right combination.” That’s what came to fruition with the Yukon at Benson, a 241-unit apartment and townhome complex in northwest Sioux Falls developed by Signature Cos. with funding from Ernst Capital investors.

“This is an area that’s on the future edge of Sioux Falls development in an area where there’s potential for economic growth, which is where we like to locate many of our investments,” Daugaard said. “The Yukon has performed really well. Construction came in below budget with our entire contingency left over, lease-up continues to be very strong, and we expect to stabilize occupancy in the next month.”

Ernst Capital financed its first opportunity zone project in Sioux Falls at Aspen Commons, a multifamily development near Jefferson High School. “We didn’t have investor capital in it because this was a new concept and we wanted to figure it out using our dollars and not investors’ funds,” Daugaard said. “We learned more about the program, got more tax guidance and were glad we did a dry run without any investor dollars at risk.”

In a qualified opportunity zone, tax benefits are twofold. Investors can defer capital gains taxes by reinvesting in qualified projects located in these zones, and if the investment is held for at least 10 years, any additional gains on that investment can be tax-free. “Our investments are generally long-term, so it’s a good fit,” Daugaard said. “That said, the benefits are unique on an individual basis depending on your tax situation. So you’ll want to talk to your tax professional to determine if it’s a good fit for you. Because this is a decade-old program, most tax professionals have had experience with it.”

Ernst Capital also invested in an opportunity zone project in Box Elder, where Lloyd Cos. developed The Union multifamily complex, primarily for those serving at nearby Ellsworth Air Force Base. “That development also has done well,” Daugaard said. “It’s up and stabilized with 97 percent occupancy and well within budget for construction.” South Dakota currently has 25 designated qualified opportunity zones in 17 counties. Now that the program is permanent, South Dakota will be able to reevaluate which areas will be designated as federal criteria evolves. “There are maps showing potential opportunity zones, and they will be redone every 10 years going forward to reflect changing demographics and market conditions,” Daugaard said. “From there, South Dakota will be able to decide where specifically the state believes new development or redevelopment would have potential or bring the largest benefit.”

Going forward, Ernst Capital sees continued prospects for future projects. “We think the Yukon at Benson in particular is a strong example for a model that can work in other parts of Sioux Falls and other communities,” Daugaard said. “We’ll have opportunities to bring on additional investors interested in projects like these.”

todd@ernstcapitalgroup.com

ECG News, Uncategorized

April 7, 2026

Build-to-rent housing finds early market in Sioux Falls

Take the best elements of owner-occupied housing, blend them with the perks of renting, and the result explains a fast-growing housing approach finding early success in Sioux Falls. Build-to-rent housing involves developing professionally managed neighborhoods that mimic the look and feel of owner-occupied housing while being designed for tenants. “It’s really built like a single-family development, but the full plan and intent from the start is an entire rental community,” said Chris Daugaard, a partner in Ernst Capital Group. “It’s really filling a pretty unique niche in the housing market right now.”

Ernst Capital Group provided capital for the first full build-to-rent neighborhood in Sioux Falls: Willowbrook Village from developer Signature Cos., which opened in 2024 at 6544 E. Pine Grove Place, northeast of Veterans and Arrowhead parkways. The 57 detached two- and three-bedroom homes are 100 percent leased. “These are brand-new units with an attached two-stall garage and small yard. They have privacy, but they also have next-door neighbors, and they enjoy lawn care, trash service and snow removal included in their rent,” Daugaard said. “There’s definitely a sense of community that’s been formed here.” Not only that, but also the units rent for nearly $1,000 less per month than a mortgage with insurance and property taxes on a comparable single-family home, he said.

“We essentially build the whole neighborhood at once, and the land is sold in one parcel, so it’s bought wholesale instead of retail,” he explained, “and they can be financed more affordably at scale, so the cost drivers are cheaper.” Many current Willowbrook renters are retirees, “and they want the easy living with no maintenance,” he added. “Someone else takes care of the details, and they get a nice rental home that’s cheaper than buying one. It’s still early at Willowbrook, but we anticipate turnover of tenants will be significantly below other multifamily properties.”

Ernst Capital is waiting to invest in additional build-to-rent communities until there is greater clarity around federal policy related to the housing category, he said. “There are efforts by the federal government to limit large institutions buying up existing homes and competing with homebuyers, but since this is a very different concept from that, we’re hopeful the value of building brand-new neighborhoods like these is taken into account,” Daugaard said. “The conversation at the federal level doesn’t affect existing properties.” “We’re creating new housing supply in a way that’s very popular with renters. We’re able to build with scale and achieve pricing that’s incredibly positive for residents and a solid value for investors.” In anticipation of being able to move forward with additional projects, Ernst Capital is actively considering opportunities in Sioux Falls and other markets it views as a good fit, he said. “We have one site that’s ready to go,” Daugaard said. “There’s definitely potential in other markets where we do business. People are surprised when they hear the numbers because it really brings value to a renter you can’t get anywhere else.”

todd@ernstcapitalgroup.com

ECG News, Uncategorized

February 20, 2026

Local real estate investment firm details success of downtown Des Moines development

The appeal of downtown living combined with intentional investments in quality-of-life amenities has spelled success for a multiphase, master-planned community in Des Moines. Gray’s Station, a 75-acre community developed and constructed by Hubbell Realty Co., is located along 2 miles of the Raccoon River, with 1 mile of wetlands and access to 87 miles of connected running trails and 1,500 miles of connected bike trails. What was once an abandoned rail yard, Gray’s Station began in 2017 with three phases of LINC apartments as part of Hubbell Real Estate Fund, supported by investment capital provided by Sioux Falls-based Ernst Capital Group.

“It’s just gone so well, and LINC was the first piece to the puzzle with a mix of rental apartment and townhomes in the first three phases,” said Claire Brehmer, communications manager for Hubbell Realty. “Now that those properties are stabilized and operating successfully, we are able to add additional homes to the neighborhood that will complement the existing units on-site in many ways.”

The fourth phase brings 135 additional one-, two- and three-bedroom units and 51 attached tuck-under garages to the development. Ernst Capital provided $7.1 million in capital to the $27.4 million project. “The first three phases have done really well. We have a downtown market-leading amenity package and breadth of unit types, from studios to large townhomes with attached garages,” said Chris Daugaard, a partner in Ernst Capital. “The lifestyle offered by the entire development has been very attractive to residents, and we’ve exceeded expectations so far. It feels like the perfect fit with the easy, comfortable, active lifestyle you can find in a quiet suburb, with direct access to all the entertainment and vibrancy of a city’s downtown. You can ‘have it all,’ as they say.”

Using insight from the first phases, the developer was able to optimize popular unit styles in the fourth phase. LINC IV’s center-load apartments will be split between two buildings, including some options for walk-up units. High-end finishes include wood cabinets with quartz countertops, a stainless steel appliance package, tile backsplash, modern plank flooring in the kitchen and bathroom areas and designer lighting. Each unit will include its own washer and dryer and private patio or balcony. On-site amenities include a lounge/work area, bike/kayak/paddleboard storage, community lounge, game room and fitness center.

“We’re also able to adapt with amenities that are more recently popular such as a Pilates studio and sauna to provide some unique benefits for the residents of the fourth phase, as well as build in some additional parking that will benefit the entire development,” Daugaard said. Residents also can access LINC’s shared amenities, including a state-of-the-art work-from-home business center, game room, two-level fitness center, rooftop patios, theater room, dog park, outdoor pool and clubhouse with feature kitchen, and access to the neighborhood walking, running and bike trail system. “The community has a large boulevard, or ‘paseo,’ with a pergola and picnic area where they hold a monthly summer concert series, and Phase IV has a connection to the paseo that runs right through the middle of the property,” Daugaard said.

LINC IV is connected directly to Gray’s Lake Park by the Coleman Bridge, running from the community over the Raccoon River. The park features fishing, swimming, canoe/kayak rental and biking/walking trails. A new playground and splash park are expected to open this spring. Its location along the riverfront is also slated to become a whitewater park, kayaking destination and surfing location, via the Hubbell Trailhead and ICON Water Trails. With a direct connection through Gray’s Lake Park and the Fleur Drive underpass, residents can walk or bike to Water Works Park, one of the top five largest urban parks in the United States, encompassing nearly 1,500 acres of public space, with amphitheaters that host many events throughout the year. “Central Iowa is known for its bike trails, and this was an easy way to connect people to water recreation, bike trails and music,” Brehmer said. “We’re especially excited to support the new Hubbell Trailhead, which is expected to open next year and will bring a really family-friendly place to kayak, tube or just walk in the water. We see it as a focal point for downtown schools to get kids in nature and integrate with the wetland basin system we’ve created at Gray’s.”

There’s another big amenity on the way too. USL Pro Iowa is working to build a professional soccer stadium and global plaza just three blocks west of the LINC IV site. Once complete, the state-of-the-art, multiuse facility is expected to host a variety of sporting and cultural events, including professional soccer, establishing Des Moines as a premier destination for sports and entertainment. Construction is expected to start later this year or early next year. “It’s going to bring significant investment, energy and renewed momentum to the downtown core, including Gray’s Station,” Brehmer said. “Our residents will be able to walk to practice fields and an actual stadium, plus the developer is looking at some retail and office opportunities, and I really believe this will help accelerate the vision.”

The relationship with Ernst Capital has been key to LINC’s success, she added. “They’ve absolutely been a fantastic partner,” Brehmer said. “This is one of those projects that takes forethought and an immense amount of trust. It’s a master-planned community, so you have to look at the first phase and realize it’s part of a much larger picture, and they’ve been willing to do that and ebb and flow through quite a few market changes.” That has included pre-pandemic lease-up, pandemic-era population growth and post-pandemic challenges. “The market has done some interesting things, but it’s been really good to have a reliable, steady partner to be there alongside us for this project,” Brehmer said. The two new buildings are scheduled to open in March and April, with hard-hat tours beginning soon.

todd@ernstcapitalgroup.com

ECG News, Uncategorized

December 31, 2025

Strong investor interest supports new multifamily projects in Sioux Falls, Dakota Dunes areas

As soon as Ernst Capital Group made its most recent two multifamily development opportunities available to investors, they responded. “Honestly, these offerings sold out faster than any projects we’ve done in the last few years,” said Chris Daugaard, a partner in Ernst Capital, which connects investors with quality local real estate projects.

“The capital came in much quicker than we expected.” The two multifamily projects are being developed by Sioux Falls-based Signature Cos. One is in Sioux Falls, the other in the Dakota Dunes area of North Sioux City. “They both are fairly large projects, so they were separate investment offerings of $9 million and $8 million in equity, respectively,” Daugaard said.

The 168-unit Split Rock Townhomes in Sioux Falls are the second phase of Split Rock Village, which is on the city’s east side at 26th Street and Six Mile Road. It follows the first phase of traditional apartments that are set to finish early next year. “It’s among the largest multifamily developments in the city,” Daugaard said. “In the townhome phase, we’ll have a blend of two- and three-bedroom floor plans, all including two-stall garages.” All townhomes will include a full appliance package, including a washer and dryer, plus patios or balconies. Rents will range from about $1,450 to $1,650.

“Our approach is to keep these as affordable as possible while still offering nice floor plans and amenities,” Daugaard said. “That’s our niche — a high-value property that’s still affordable.” The combined community will offer 412 units when fully built out and share a strong package of amenities, including an outdoor pool, clubhouse with fitness center, game room and golf simulator, plus a large playground and dog park that will be built as part of the townhome project. “The playground and dog park are larger than many of our other apartment communities, but this is a property that’s not quite as close to parks and schools even though it’s in a growing part of town, so we anticipate these will be widely used,” Daugaard said. So far, new residents are responding to the development.

“Our first phase is renting up really well even though we dealt with road construction much of the season,” Daugaard said. “It was great visibility as it brought a lot of traffic by the community, but more broadly, I think the east side is really exploding, and from this location, you have easy access to Veterans Parkway, Dawley Farm Village and nearby amenities like Willow Run Golf Course, Arrowhead Park and the Big Sioux River — plus Good Earth State Park is just a short jaunt south. “Broadly, the townhome market continues to attract resident interest,” he added. “Traditional apartments are still very appealing to people who want a high-quality apartment for the most affordable price,” he said. “However, townhomes can still be affordable, and demand has grown in the last few years as the single-family home market has become less affordable for many buyers. The townhome product is for someone who wants the single-family home experience but isn’t in the market to buy or who appreciates the flexibility that renting allows.” Construction also has gone faster than anticipated, meaning some of the first townhomes will be available for tenants yet this year. “The lion’s share of the project will be delivered next year, and we’ll finish the last part in early 2027,” Daugaard said.

In North Sioux City, the Prairie Dunes Apartments will offer a 177-unit mix of traditional apartments and townhomes on the edge of the Dakota Dunes area in North Sioux City.

“That metro hasn’t grown as quickly as Sioux Falls, but we’ve seen very, very strong demand and occupancy for multifamily in the North Sioux City area, and we like that we can stay on the South Dakota side of the border from a tax and regulatory standpoint,” Daugaard said.

“We’ve seen significant demand for high-quality, high-value housing with the amenity package we offer.” The project is located in Union Crossing, North Sioux City’s first major mixed-used land development, bringing together eventual multifamily, high-density and traditional owner-occupied housing and commercial sites on one property.

“It’s a landmark deal for North Sioux City. For us, this is a very similar development to Split Rock in Sioux Falls but about half the size,” Daugaard said. The plan is for two 50-unit traditional apartment buildings, offering studio, one-, two- and three-bedroom floor plans, plus 77 two- and three-bedroom townhomes. Both housing types will be built at the same time.

“We’ll begin to open units halfway through next year,” Daugaard said. “And we have some flexibility to adjust our building pacing if needed.” The amenity package will be similar to Split Rock as well, with a clubhouse offering a fitness center and gaming area, outdoor pool, playground and dog park.

Investor interest in both Ernst Capital offerings was driven by multiple factors, including the opportunity to take advantage of lower-trending interest rates and more-favorable costs, Daugaard said. “I think people also were looking to continue investing in their region. North Sioux City was an opportunity for some of our investors to get into a new market they hadn’t been in before,” he said. “Plus, we think the consumer trends are in our favor. We’re happy we’re in the affordable space and that we’re offering the sort of living option that seems to meet a growing number of people’s needs.”

todd@ernstcapitalgroup.com

December 5, 2025

Ellsworth Air Force base runway has reopened

The Air Force base Box Elder, SD has recently reopened after a ten-month construction project.

“This nearly $130 million construction will also bring back the B-1 Lancers and airmen who were temporarily based at the Grand Forks Base.” “It’s more than just about bringing the iron and the airplanes home, we’re bringing approximately 700 airmen back home that since the first of February or even a little bit before have been separated from their families. But even though the bombers weren’t flying out of here, the ability to deliver long-range strikes throughout the world was unabated,” Lord said. The last construction project for the base runway was back in the 80s, when the B-1 Lancers made their way onto the base,” according to the article.

todd@ernstcapitalgroup.com

ECG News, Uncategorized

November 21, 2025

Spirit of Sioux Falls Award goes to Todd Ernst

Todd Ernst was recently awarded with the Spirit of Sioux Falls award from the Sioux Falls Development Foundation. Todd is the founding partner of Ernst Capital Group. “This award honors the legacies of men who committed their lives to the economic development of the Sioux Falls area,” according to the article.

todd@ernstcapitalgroup.com

ECG News

May 15, 2025

Sioux Falls real estate investment firm expands to Omaha with multiphase development

A major multifamily development marks the first foray into the Omaha market for Sioux Falls real estate investment firm Ernst Capital Group. Cherry Creek Village sits on 60 acres on Omaha’s west side near Potter Street and Highway 133. “We’ve been interested in entering the Omaha market for a while, and this site allows us to deliver what we think the market is looking for,“ said Chris Daugaard, a partner in Ernst Capital. “It has direct access to I-680, and you can get to the rest of the metro area very easily. It’s a place for people to enjoy a quick commute and allowed us to get into a large land development while keeping costs down to help the project be most effective.”

Ernst Capital, which offers private real estate investments for accredited investors, partners with developers to assist in financing. For Cherry Creek Village, Ernst Capital partnered with Sioux Falls-based Signature Cos. on the apartment development, which will be managed by Sioux Falls-based Lloyd Cos. “We have long, positive histories with both companies, which gave all of us confidence heading into a new market,” Daugaard said.

“We’re building units here that are attractive to renters but still offer an attainable rent price point. We think there’s a ton of demand for that regionally even in areas where there’s a lot of supply. We’ve been able to lease up well because even while residents are more price-sensitive, they still want a place that’s nice, and we think we hit a healthy medium.” The concept at Cherry Creek Village is similar to Willows Edge in northeast Sioux Falls and other Signature developments that also offer a range of housing styles. It started with 203 garden-style apartments across five buildings, offering studio through three-bedroom floor plans.

A clubhouse will offer an outdoor pool and community gathering spots with a golf simulator, fitness center, coffee bar and gaming area. “We’ve done this same building type in eight other regional developments, so we know what we’re building, Signature has a team that’s very familiar with it, and we’re able to utilize some of our subcontractors who have worked on previous projects,” Daugaard said. The first two buildings are about 80 percent complete, along with the clubhouse. The plan is to turn over the first units in July. Future phases will include additional garden-style apartments as well as townhomes. “There’s about 48 usable acres for development because of some great topography in the area, with a really nice creek running through it. We’re retaining a wooded area around it, so it’s a really attractive larger development site that will lend itself to outdoor recreation,” Daugaard added.

“As we were talking to potential lending partners, we kept hearing that our rent projections seemed to be conservative, so we think there’s potential for rent upside after lease up.” “Omaha is somewhere we plan to be over the long term, and once Cherry Creek gets more mature, we’ll look at additional sites.” He anticipates Ernst Capital could put together investments for more than 1,000 units in the Omaha market in the next five to 10 years. “We look at it as an expansion market, much like we did with Des Moines in 2014, and now about a third of our portfolio is in that market,” Daugaard said. “It’s a conscious decision to look at regional markets that are similar in size where we like their future growth opportunities. It just made sense as a natural market for expansion.”

todd@ernstcapitalgroup.com

ECG News

April 23, 2025

After decades away from Sioux Falls, returning residents find fit in first-of-its-kind rental community

Tami and Craig McKenzie have marked 10 major moves in their 42 years of marriage — but the latest led them home again. “I grew up in Sioux Falls, but my husband and I have been in the desert 24 years, and we just were far from family and knew we weren’t getting younger, so if we wanted to move closer to family, we needed to make that decision,” she said. But Sioux Falls is a significantly different place from when she grew up on the west side. So before committing to something permanent, it made sense to rent and get a feel for the community. “My sister-in-law was kind enough to connect us with an agent through Lloyd Cos., and we were able to see some rental properties last summer,” McKenzie said. “At that point, we talked about Willowbrook, and I said, ‘OK, here’s our minimum size requirement for a new place to live, we’re going to get our house on the market, so keep up apprised, and we’ll keep our eyes open.’”

It wasn’t long after that she saw a story on SiouxFalls.Business and was prompted to circle back and see if a three-bedroom property was available at Willowbrook Village. “We were able to find a home being built at Willowbrook that was close in size to what we had in Tucson,” McKenzie said. “We were thrilled this came available because we sold our house only two weeks after coming on the market.”

Willowbrook Village at 6544 E. Pine Grove Place is northeast of Veterans and Arrowhead parkways. The business model, while not unique nationwide, is the first fully build-to-rent community in Sioux Falls, offering single-family detached homes available to rent. The McKenzies moved late last October into a three-bedroom rental home with a walkout basement. “What we’re starting to find is that it’s a good option for both permanent residents and empty nesters or people looking to not necessarily be in Sioux Falls all the time,” said Chris Daugaard, a partner in Ernst Capital Group, which put together the investment for the development. “It’s a good option, where they have a stand-alone home, their own garage, no shared walls or halls, but they also can lock the door and leave when they want to, knowing that others are taking care of the details. They can sign a lease and try out the lifestyle without committing to buying it.”

Willowbrook Village was part of Ernst Capital Group’s recently closed Signature Fund VI, which put together two multifamily development investments for Signature Cos. totaling just under $50 million in real estate. Of the 45 homes available to lease in the Willowbrook property, 41 are already pre-leased, with 12 homes still under construction. “It’s a rental home, and it’s brand-new,” Daugaard said. “People are impressed when they go through. It feels more like a nice, newly built spec home. They’re very nice finishes, and we’re able to offer it at a rent price that is accessible for many people but still works for the project.”

Willowbrook residents rent either a two- or three-bedroom home with an attached two-stall garage. Snow removal, trash, lawn care and all maintenance are covered by the rent. “It’s a great part of town to be in, and more development is occurring coming all the time along Veterans Parkway and Highway 42,” Daugaard said. As an investment property, Willowbrook Village is structured such that at some point in the future, the homes can be sold to owner-occupants, or it could change hands as an entire complex. The McKenzies were happy that their first winter out of Arizona was a mild one, but they still appreciated snow removal from their property management team and are looking forward to becoming reacquainted with the community Sioux Falls has become. “We haven’t gotten to know our neighbors too much at this point, but everyone waves, and some people have stopped to talk, and they’re very nice,” McKenzie said. “The management is very good here, and it’s nice not to worry about another move for at least a couple years. I grew up here, and it’s nothing like it was, so there’s a huge learning curve.”

todd@ernstcapitalgroup.com

ECG News

March 12, 2025

Phase IV LINC Apartments, LLC Closed, Raised 7.1 Million

Ernst Capital is pleased to announce that fundraising for Phase IV LINC Apartments, LLC has closed. Private investors throughout the US committed $7,100,000 in capital for the development project located in Des Moines, IA. Thank you to all who invested in or considered Phase IV LINC Apartments, LLC.

LINC IV – The fourth phase of a multi-family development in Gray’s Station in downtown Des Moines, Iowa. Started in 2018, LINC I was one of the first components of the larger Gray’s Station neighborhood and is located on the prominent corner of MLK Jr. Parkway and SW 11th Street in downtown Des Moines. LINC IV is expected to bring 135 units and 51 attached tuck-under garages to the development, joining the greater multi-family community of LINC I, LINC II, and LINC III (Linc Townhomes).
The greater LINC community offers residents a market-leading amenity package, including several gathering spaces, state-of-the art business center, game room, two-level fitness center, theater room, dog park, outdoor pool and clubhouse with feature kitchen, and access to the neighborhood walking, running, and bike trail system.

todd@ernstcapitalgroup.com

ECG News

March 11, 2025

Juice Stop opens new south side location

Juice Stop is has moved from its 57th Street location to a location on 69th and Cliff that has a convenient drive-thru. The new location opened last week at 1404 W. 69th St., and hours are 6:30 a.m. to 9 p.m. weekdays, 8 a.m. to 8 p.m. Saturday and 11 a.m. to 6 p.m. Sunday, according to the article.

todd@ernstcapitalgroup.com

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