Amazon has announced a second 270,000 square foot sortation center that will be built next to the 645,000 square foot fulfillment center. The larger warehouse is to open toward the end of 2020. The newly announced warehouse will provide 100 additional jobs to the area.  “Amazon will hire 100 full-time workers at the new warehouse, which developers should finish building by July. The company also will hire 200-300 temporary workers during busier seasons.”, according to the article.  

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Amazon recently announced the need for around 1,000 new employees to work in the new fulfillment center in Bondurant. The new center is an exciting addition to the area. Blue Ridge Commons is under construction less than two miles from Amazon’s new location. City Administrator, Marketa Oliver has stated “It’s a huge addition to the community, when you have people working in your community, they’re going to stop and get gas. They’re going to eat lunch. They’re going to buy groceries here. Maybe they will decide to buy a home in the city. It’s a huge deal to have that center of employment.”, according to the article.  

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Major apartment projects, established retail development and a new property in Harrisburg all are part of a local firm’s latest investment fund. Sioux Falls-based Ernst Capital Group recently closed its third real estate investment fund with local developer Signature Cos. The Signature Real Estate Income Fund III raised more than $16 million in private investment to support four local projects. “We’re excited to have these four new, local investments in the Sioux Falls area,” said Chris Daugaard of Ernst Capital Group. “Our investors can drive around our area, see the projects and know that’s what they’re helping to build. When you look at where we’re investing, you also can see where we think growth is heading in this market.”

Willows Edge Commons

A significant portion of the Signature Fund III is an investment in the Willows Edge Commons apartment project, “the entry point to a larger development that’s going to be really, really cool,” Daugaard said. “It will transform the area.” The full 180-acre development from Signature Cos. is along Arrowhead Parkway between Dawley Farm Village and Willow Run Golf Course and will include commercial, multifamily and both single-family and town home for-sale units. The area also will feature a planned recreational trail running through the entire development, with two pedestrian bridges and integrated city park land, highlighting the waterway running through the site.

The first phase will be on 18 acres and include 334 multifamily units. The style will vary, including about 150 units in three-story traditional center-load apartments and the remainder in town house-style units with and without attached garages.

“This is along a main corridor into Sioux Falls with a lot of neighborhood commercial in the area that we’ll control,” Signature owner Clint Ackerman said. “We feel like multifamily is a great catalyst for everything in those developments given its proximity to the eastern gateway of Sioux Falls. It’s a direct shot to downtown and a lot of employment.” The apartments will include community amenities such as a coffee bar, gaming area and golf simulator plus a fitness and pool area. Construction has started, and the plan is to start leasing in early 2021.

Whisper Ridge Commons

On the far southeast side of town, another apartment complex developed by Signature is leasing up. Whisper Ridge Commons was also part of the Signature Fund III and includes two buildings totaling 221 units with a two-story attached community building at Graystone Avenue and 69th Street.

“They’re more of a traditional market-rate center-load apartment,” Ackerman said. “I think the southeast part of Sioux Falls really carries a residential feel, and people like to go home to somewhere that feels like a neighborhood, whether they rent or own. So that part of the community really seems to flourish.” The units range from one to three bedrooms and have a modern, almost downtown, feel to them, including some two-story loft units.

“We figured there’s no reason you can’t do that look in the ‘burbs, and it’s going really well,” Ackerman said. “Lease-up is going very well. We just opened the doors to the first 60 units in September, and we had about 40 leased opening day. Residents share an amenity package that includes a two-story clubhouse with a lofted fitness center, gaming area, golf simulator and indoor/outdoor social spaces plus an outdoor pool and patio. The second building is expected to be ready in April. “The 57th and Sycamore area has been busy for some time now, and I think you’re seeing development push down to 69th Street, and it will continue to move,” Daugaard said.

Waterfall Plaza

The Signature Fund III also includes investment in an existing property, Waterfall Plaza on the southwest corner of 69th Street and Minnesota Avenue. “We like the existing tenant mix, and we think it’s an attractive property in a lot of ways,” Daugaard said. “It’s well designed, and it’s got good visibility. This isn’t a corner that’s going to be slowing down. If anything, there are more rooftops coming nearby, so we think the traffic will be solid, and there will be a good opportunity to fill vacancies if we have any.” There aren’t any now. Waterfall Plaza is fully leased with retail and office and is adding on to the gaming side of Tinner’s restaurant. “That’s obviously encouraging given some of the challenges seen elsewhere this year, so we’re happy with the performance and think we’re going to see continued strong activity here,” Daugaard said.

“We’ve done a number of funds like this where we’re looking to pair new development properties with existing properties that are stabilized and we acquire. It creates a small portfolio with some diversification.”

Creekside Plaza

Ernst Capital also included its first investment in Harrisburg in the most recent fund. The Creekside retail and office center at Cliff Avenue and Willow Street “is our first development in the Sioux Falls metro area that’s not in the city limits of Sioux Falls,” Daugaard said. “We anticipate a couple more investments as these lease up. The site offers outstanding visibility and surrounding future developments, include a Sanford clinic and B&G Milkyway.” The retail center developed by Signature has solid occupancy, Ackerman said.

“I think about 70 percent of the space is spoken for right now, and we feel it’s meeting or exceeding expectations and doing very well,” he said. “We’ve leased multiple spaces to a dentist, another space is a financial planner, and we are working with a couple of other interested businesses about locating in the remaining spaces at Creekside Plaza.” Overall, working with Ernst to raise capital for the projects has been a good process, he added.

“They’re a great equity partner. Everything is on time and on target, and they’re just easy to work with.”

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As anyone invested in the stock market has learned this year, Wall Street can present its share of challenges for investors. At Ernst Capital Group, we believe it’s always a good time to consider investing locally, but there are especially strong benefits during periods of volatility like 2020 has presented.

Here are just a few reasons to consider investing locally as part of your portfolio.

It’s simplified and strategic

Ernst Capital Group is based in Sioux Falls. Our offices are downtown. Our team lives here. When we invest with local real estate developers in Sioux Falls or other regional markets like Des Moines, we know them personally. That simplifies our approach to investing, and our investors’ relationship with us. We know the markets, we know the players, and we’re investing in projects and properties we know. That gives our investors confidence – and they know we’re only a phone call or meeting away if they ever have questions. When dollars flow to Wall Street, think of all the hands that touch them. There are many entities involved – even if you don’t see or know them – that ultimately bring associated costs. We keep it simple.

There’s less uncertainty

With Wall Street investments, one day of bad news can cause an enormous drop in values. We certainly saw that earlier this year with COVID-19. Pricing is subject to day-to-day volatility, and it can change instantly. While our investments aren’t completely insulated from market volatility, they also are not directly correlated to what’s happening on Wall Street. Of course, we had concerns with COVID-19, too, as we wondered whether tenants would be able to continue paying rent, but we knew it would be short-lived. The long-term outlook – our strategy – didn’t change. We’re able to look for the right market timing to sell our assets. We’re always doing that. We’re disciplined about finding favorable timing. For investors, that means capital might not be readily available for emergencies, but if this is a fit for your situation, it’s quite beneficial in the long term.

Dollars stay local

And finally – maybe most critically – your dollars stay local. If you’re more confident in our local economy than in the national economy, this is an investment strategy to consider. Our investors enjoy helping build the communities where they already have invested personally in the form of home ownership and sometimes business ownership. By supporting the growth of multifamily and other commercial projects in places like Sioux Falls and Des Moines, you generate a vibrant development community and ultimately keep the cost of living down. Communities that don’t have supply see huge rent increases. But in our markets, steady population growth and reliable development activity help maintain stability. So many of our investors are philanthropic. They support an enormous number of causes throughout our community and beyond. Investing with Ernst Capital is a logical extension of that. These investors already have an affinity for their community, and this allows them to help power its local economy.

Some of our investors also just love driving by and seeing a building under construction. They love checking on the progress. And it’s rewarding to them to see that, and it’s rewarding for us that they truly are so invested in so many ways.

Our business model offers so much more than looking at a number on your brokerage account. If you’d like to learn more, please visit us at ernstcapitalgroup.com.

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In a recently released 2020 list produced by WalletHub, highlighting Best and Worst Run Cities in America, Sioux Falls was named one of the best.  Sioux Falls landed the number 11 spot for “Overall Best Rank”. The rankings pooled together many other rankings such as; “Lowest Long-Term Debt Outstanding per Capita”, “Highest High-School Graduation Rate”, “Financial Stability Rate”, among many others, according to the article.    

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Ernst Capital Group was recently featured in an article on SiouxFalls.Business.  The article dives into how the company was started in 2007, what we do for our investors, and how we are specialized to the Midwest region. The article also highlights each of the four partners and a bit of their backgrounds and specialties they bring to the company.  

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LINC, the first project in Des Moines’ new neighborhood, Grays Station, is set to open to its first residents at the beginning of July. The 75-acre neighborhood is “linked” via the first apartment building. The neighborhood is to feature apartments, townhomes, commercial area, parks, and a walking trail. Kris Saddoris, Hubbell’s vice president of development has stated, “That’s why we’re here – to take a piece of downtown and pull it further south.”  Read more in the full article linked below.

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