Eventually, it moved from valuing the buildings for owners to valuing the buildings for the lenders of those properties. I spent a lot of time researching the loan maturities for buildings. And the conclusion that I came to was that a lot of these buildings were going to be facing loan maturity — or the debt was going to be coming due — in ‘23, ‘24, ‘25, ‘26. And because of the interest rate environment, they wouldn’t be able to refinance — and would more than likely be handing the keys back to the bank.
Finally, I just decided I couldn’t sit on the sidelines any more and watch this opportunity pass me by. Because I just realized that we were heading into the greatest buying opportunity of our lifetime.
How does Willow Peak operate, and who are your investors?
We have lots of partners that we outsource a lot of things to. I would say that founding Willow Peak was about taking my experience in transforming properties and creating vibrant spaces, and applying it on a larger scale.
For this building [300 1st Av. N], some of it’s really just our own money, and then we have a couple partners on the deal with us. Willow Peak represents the general partnership of the building, and [Minnetonka-based] Onward Investors is the limited partner or the equity partner. Willow Peak is really the one who is in charge of the repositioning strategy, the lease-up — making sure that the building performs as an investment.
It’s very ambitious to say this, but our goal in 2025 is to raise a $100 million fund. There’s a lot of challenges in doing that, especially for a new firm like ours. But I think the opportunity is there — for family offices or high-net-worth individuals or financial advisors that are looking for alternative investments with a high return. With Willow Peak, investors are part of a mission-driven effort to support urban renewal while achieving meaningful returns.
Read More: Why Erin Fitzgerald stopped selling downtown Minneapolis commercial real
