Ernst Capital is pleased to report that the Dakotas Real Estate Income Fund IV, LLC (“Dakota Fund IV”) has closed on its sale of the PetSmart property located on the east side of Sioux Falls, SD. The transaction was finalized on July 15th, 2024, as a local investor purchased the property.
We’d like to introduce you to one of the members of our team, Kody Henning. Kody is a Senior Associate with Ernst Capital where he assists with asset management of the investment properties. Prior to joining Ernst Capital in the fall of 2020, Kody worked in accounting and financial analysis roles in the healthcare and insurance industries. Kody is a graduate of Minnesota State University, Mankato, with a Bachelor of Science in Accounting and Finance. Kody is a CPA and is pursuing licensure as a Securities Representative.
Tell Us About Yourself:
I grew up in Adrian, MN, 45 miles east of Sioux Falls. My childhood was full of watching and playing baseball. Because of baseball, I met my high school sweetheart, Carly, and she followed me to college at Minnesota State University, Mankato. After graduating, we spent three years south of the Twin Cities before getting married and relocating to Sioux Falls in 2019. We have a daughter, Hallie, and a golden retriever, Winnie. We love Sioux Falls and never plan to leave.
Where would you like to go on a dream vacation?
A few decades too soon but I can share my current dream retirement vacation. My plan is to experience the east coast by bouncing between cities every one or two months living in furnished, short-term rentals. I appreciate the history of the east coast and would really enjoy attending sporting events at all of the stadiums in the cities. Consider it a hybrid of what a lot of baseball enthusiasts do when attending games at all MLB ballparks in a summer.
You’re happiest when?
I’m happiest when I’m around water. Whether it is a lake, ocean, river, or pool – you name it, I love it. Unfortunately, it is also true for my golf game. Always in or around the water.
Pho Thai is opening a second location on the west side of Sioux Falls. “We have a lot of customers that have requested it, and Sioux Falls is growing, and we want to be a part of that,” co-owner Kim Ueng said. The original Pho Thai opened in 2019 in Shriver Square at 11th Street and Phillips Avenue”, according to the article. The new location will feature the same menu and have the same hours as the downtown location.
Multiple developers are beginning projects on the southeast side of Sioux Falls along Six Mile Road. “I think we’re seeing more and more people move to the southeast side of Sioux Falls. Sioux Falls has to grow somewhere, and that’s what we’ve been seeing. The Brandon school district has been desired, and (this area) allows people to be in the Brandon school district who still want the amenities (of Sioux Falls)”, said Zach Jacobson with Signature Companies. Dawley Farms retail opportunities also help drive people in Sioux Falls to seek out eastside residences.
Stadium Plaza, which is located off of 69th and Cliff is quickly gaining tenants and adding new businesses to the area. According to the article, “A new fast-casual restaurant, a fitness studio and a medical office will be among the latest additions to a fast-growing south Sioux Falls intersection.“ “We’re very excited for the new businesses to bring locations to the development as the housing nearby will have some built-in customers looking for their services and become a valued amenity for the neighborhood,” said Chris Daugaard, a partner with Ernst Capital, which assisted the property in its Signature Fund IV, which raised capital – largely from local investors – to support multiple projects for developer Clint Ackerman, owner of Signature Cos.
Both commercial and residential growth is ramping up on the east side of Sioux Falls along Arrowhead Parkway. “I think we are meeting expectations,” said Clint Ackerman, owner of Signature Cos., which is developing multiple east-side properties, including 180 acres north of Arrowhead Parkway and west of Six Mile Road. “Commercial and multifamily is ahead of schedule or ahead of expectations, so we focused on getting that done and slowed down the residential. … Now, a majority of our activity is on the east side of Sioux Falls”, according to the article. The Alibi and Scapegoat are two restaurants that have recently opened allowing additional choices for residents in the area.
Two years ago, the northeast corner of 69th Street and Cliff Avenue was among the last large parcels of available land in the rapidly developing area of south Sioux Falls. One year ago, there were hints of its promise as the first commercial buildings began taking shape. Today, it’s a bustling corner filled with retail and residential growth – plus more on the way.
“We were attracted to the potential of a new, infill development on a corner that was already seeing so much traffic,” said Chris Daugaard, a partner in Ernst Capital. “The location was destined to be attractive.” The 20-acre parcel became part of Ernst’s Signature Fund IV, which raised capital – largely from local investors – to support multiple projects for developer Clint Ackerman, owner of Signature Cos.
“There was so much activity already around this area, and the concept of retail with multifamily really brought in uses that complemented one another,” Daugaard said. “There was an opportunity to partner with others looking to build or locate businesses there, bring in some of our own retail to complement it and add in a multifamily project to capitalize on the development. We felt it could be a real win-win, and that’s definitely been the case.” Zach Neugebauer, owner of Year Round Brown, saw the potential early. He invested in a retail center called The Bloc fronting Cliff Avenue that also became a location for his tanning salon.
“Year Round Brown has seen a significant increase in traffic since moving a few blocks down the road to the new location at The Bloc,” he said. “This large space really allows us to offer our full line of services such as sunbeds, spray tanning, red light therapy and 3 Degrees infrared saunas with virtually no wait times. As for the location, the combination of a great tenant mix bringing more people to the area and easy access off Cliff Avenue makes visiting Year Round Brown really enticing.” The retail center leased quickly and now includes Gloss Nails, Starbucks and Cookie Co.
“The feedback on our strip mall has been just as positive,” Neugebauer said. “The tenants have all expressed happiness with the consistent daily traffic, visibility and tenant mix. In addition to the success we are having at The Bloc, we are also really excited with the development around us.” The corner also proved a hit for new B&G Milkyway franchisees Josh and Christie Aberson. They’re wrapping up their first season and said the location has been fantastic.
“It’s truly a neighborhood restaurant, and the surrounding community has welcomed the store with open arms,” Josh Aberson said. “It’s very approachable from either north/south- or east/west-bound traffic, but also pedestrian with a lot of families making it a destination for a walk, bike ride or after-school treat. We hear that the oversized patio space with turf, games and furniture is exactly what customers were looking for and now the double drive-thru is open and running great to ease those busy drive-thru lines. We’ll be excited to see the rest of our neighbors finish out their projects and construction to finalize the development.” That progress will be continuing through this year and into next. Casey’s General Stores is making solid construction progress along 69th Street. And soon, the first residents are expected to be living within an easy walk of the neighborhood businesses.
The Overture is a 258-unit apartment building that will offer lofted studio, one- and two-bedroom apartments. “They are very interesting and appealing floor plans,” property manager Ilaria Blackwell said. “We’re already getting interested in them in anticipation of residents moving in before the end of the year.” The apartment community will include an attached two-story clubhouse and full slate of amenities, including a swimming pool, extensive indoor-outdoor community space and a fitness center. “The walkability is incredible here,” Blackwell said. “Whether you’re walking for coffee or fitness, Sioux Falls Christian Schools or the USF sport complex, there’s such a wide variety right nearby.”
Additional retail centers are under construction with a number of tenant announcements expected soon. “We’re looking to fill in with some more businesses that are complementary to what you see already. It would be great to add some retail service businesses or office-type users. We have room for something like a day care or bar/restaurant,” Daugaard said. “We love the idea of adding amenities to the neighborhood, both for use by our apartment residents and others in the area.”
Scooters is expanding into Harrisburg along Willow Street and Creekside Avenue, near Creekside Commons and Creekside Plazas I and II. “Willow Street has some new additions opening soon, and we’re excited to be part of that growth as well along the street,” according to the article.