This edition provides a detailed look at our newest acquisition: Hillcrest Place Apartments, a 111-unit community located in Little Canada, Minnesota. Ridgeview Property Group teamed up with Hall Sweeney Properties to acquire the asset, and we closed on the deal in December of 2025. Below, I’ll walk through the property, our business plan, how we structured the capital stack, and why I believe this investment reflects the opportunity set available in today’s market.
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The Property
Originally developed as a luxury apartment community in 1977, Hillcrest Place Apartments boasts underground parking, a fitness center, and an outdoor pool. The property sits on a large 5.5-acre site in Little Canada, MN, and is made up of 27 efficiency, 57 one-bedroom, and 27 two-bedroom apartments.
Under prior ownership, the common areas, including the hallways, leasing office, and fitness center, were fully refreshed. In addition, 66 units were renovated, 22 units were partially renovated, and 23 units remain in original condition, providing a runway for continued improvements.
Hillcrest was last acquired in 2018 by an investment group based in Washington. During their seven-year hold, Hillcrest experienced steady income growth — including throughout the COVID-19 years — and was ultimately brought to market as they wound the fund down to return capital to investors.
The Business Plan
Kitchen: Before
Kitchen: After
Our business plan: take the common areas up another notch, and finish out the apartment renovation program already underway.
As leases turn over, we will upgrade the remaining units with white cabinetry, LVP flooring, updated lighting, and new countertops. While prior ownership updated the common areas and fitness center in 2018, we see an opportunity to further elevate those spaces through an updated color palette, improved signage, new artwork, furniture, and upgraded lighting.
Beyond the typical renovation scope, capital has also been earmarked for targeted building improvements. This includes replacing the notorious Stab Lok circuit breakers and addressing windows and patio doors as needed.
The Capital Stack
The purchase price for Hillcrest Place was $16.2 million, or $145k per unit. To capitalize the acquisition, we raised $5.85 million in equity from our investor group and secured an $11.9 million Freddie Mac Conventional loan. The debt has a 10-year term with a 5.56% fixed interest rate and includes 5 years of interest-only payments.
Of the total capital raised, over $600k was allocated for unit renovations, common area upgrades, and capital expenditure items identified during due diligence. By funding these improvements upfront, we set the deal up to generate cash flow from day one, regardless of the stage of the renovations.
Key Takeaways and Looking Ahead
As I covered in last month’s newsletter, there is less competition bidding on assets like Hillcrest Place, and that's where the opportunity lies.
We closed at a mid-6% cap rate, a fantastic entry point for a stable suburban property. Just a few years ago, an asset like this could have easily traded at a 5.5% cap rate, implying roughly an 18% higher valuation.
Interest rates are the primary driver behind today’s lower valuations, but asset vintage is playing a role too. With a tougher insurance environment and additional capex needs, many buyers have stepped away from 1960s and 1970s-era properties. Successfully operating these assets today requires an understanding of the nuances of buildings of this era, strong insurance relationships, and a well-defined capital expenditure plan.
At the same time, the Twin Cities market has fallen somewhat out of favor with certain institutional buyers due to concerns around crime, unrest, and evolving tenant laws. What these out-of-town groups often overlook, however, is the stark difference between urban Minneapolis and suburban communities like Little Canada. The operating environment, tenant base, and overall stability are completely different. As noted earlier, Hillcrest Place experienced income growth all throughout the COVID-19 era.
For now, I’m excited to lean into my local knowledge and pursue opportunities like Hillcrest Place that emerge when other groups choose to stay on the sidelines. I look forward to sharing more Hillcrest updates in the months ahead as we execute the plan and build long-term value.
-Ben Michel
Ben Michel is the founder of Ridgeview Property Group, an investment firm specializing in multifamily real estate. Register Here to be notified of available investment opportunities.