Meyer Real Estate dives into development in Dickinson
The principals behind Minnesota-based Meyer Real Estate Group pride themselves on their cautious, conservative approach to doing business. “We’re a long term player,” Meyer Real Estate Group President Patrick Hart assures, “we made the decision early on not to get involved in anything quick, cheap or transient. Our plan was to acquire, develop, own, and operate real estate in each of the four core areas of residential, industrial, office, and retail.”
After significant market research and due diligence in 2011, Hart and the company entered the Dickinson, North Dakota market in 2012 to put that strategy into place. In two and a half years, they’ve acquired or control approximately 1,000 acres of land located within the city limits of Dickinson, with a good portion of it already developed for industrial, residential, office and retail use. “We looked with an eye to residual long term sustainable value,” Hart goes on, “We thought Dickinson provided us with the best exit long term as the institutions would finally get comfortable with this market over the next 10 to 20 years.”
Meyer Real Estate Group was formed by a team of four real estate professionals with a diverse and experienced background including engineering, entitlement and land development, construction, finance, leasing, sales and property management. Paul Meyer’s firm, Meyer Contracting, was performing work in western North Dakota for several clients and determined there was a greater opportunity to do more. He brought together Pat Hart, Charlie Traeger and Brian Bochman to form Meyer Real Estate Group.
Meyer Real Estate Group was impressed with Dickinson’s diverse economy, propelled by manufacturing, agriculture and energy alike. Though populated by a scant 27,000 people according to recent estimates, it serves as a regional center for over 100,000 according to their market research. With an unemployment rate of 1.4%, an energy service worker can boast an average annual salary of $93,000. In addition to the oil boom advantages, Dickinson’s construction growth since 2011 has been 22 percent, and the town plans to invest $300 million in the near term to make way for its population growth, expected to reach 44,000 by 2020.
While growth is prevalent throughout the Bakken region, for Meyer Real Estate Group, Dickinson was more appealing compared to nearby Williston or Watford City. Dickinson’s notably slower and trailing growth compared to other cities was encouraging. For one, “The city was learning from those progresses and setbacks that the northern cities were encountering,” Hart says, but also, Dickinson had a “sense of place and a commitment to quality that was extremely attractive to us.”
Meyer Real Estate Group found Dickinson the optimal place to apply what Hart calls “the real estate 101 theory.” “If we buy the assets right, invest patient equity, incorporate the appropriate amount of debt, establish strong income producing assets, we can execute a long-term strategy that will benefit everyone involved,” Hart says. “We put a lot of emphasis on conservative borrowing and are very close with our lenders including them in our early concept discussions. We are equally close with our equity investors and set the expectation of more patient return on investment and a long-term vision.”
They entered the market by acquiring 80 acres for an industrial development. The group then set out and acquired over 900 acres strategically located on the East and West sides of Dickinson, this acreage would provide MREG with two master planned housing developments and a new retail and office center. Finally they acquired 72 apartments left over from the previous boom and bust of the 1980’s and set off immediately to remodel and reinvigorate them. They found themselves quickly established with income producing apartments; industrial and office flex buildings, rental townhomes, single family and industrial lot sales.
Execution of these projects progressed quickly and successfully thanks to Vice President Brian Bochman, who has lived in Dickinson since 2010. Bochman, the sole North Dakota native among the principals and the partner with entitlement and land use background, worked with city and county officials to understand and meet the needs of the community and execute the land development process.
The owners worked to build “strategic alliances” with contractors, engineers, local and national real estate companies, management and other necessary companies. “We let the experts provide services to us and we manage the projects and process, but we stay out of their way and let them do their job,” Hart says. “We’re not a huge overhead company but we have huge results.”
Meyer Real Estate Group currently has eight major projects each of which are at various stages of development. The variety of offerings available includes an industrial/commercial development, retail/office development, three residential communities, and three master-planned communities.
Meyer Business Park is an 80 acre industrial and commercial development located 3 miles north of I-94 just off Highway 22 with heavy utilities, concrete roadways, and high pressure fire suppression. The site has easy access to Highway 22 and the new truck reliever route. There are about 40 acres available for purchase, build to suit, sale lease back or JV development opportunities.
Sundance Coves is a residential community featuring winding streets, walking paths, open green space, and a park. Builder lots are still available starting in the mid $50,000 range. It is also home to Sundance Coves Villas, which are a self-developed 3 and 4 bedroom townhome project for lease ranging from $2,500 to $3,500 per month.
Westwood Court is an association maintained master-planned residential community located north of Pinecrest Commons featuring 480 custom-built manufactured homes, winding streets, ponds, walking paths, a dog park, and three community centers. The community seeks to meet the need for an affordable housing option.
Creekside is a smaller residential development nestled among existing neighborhoods offering 51 single family home lots for sale. It is an infill neighborhood close to schools and parks.
Pinecrest Commons is one of Dickinson’s largest master-planned developments comprised of more than 360 acres including land use allocations for single family, multifamily, retail, and office development. Construction started last year and lots will be available for 550 units of apartments, 80 acres of commercial, restaurant and retail, 4.1 acres for hospitality, sites for professional office projects, and lots for single family homes. Pinecrest will also be home to a new elementary school and is located across the street from Dickinson’s new Middle School planned for construction this summer.
Sundance Village is a master-planned community located in the northeast area of Dickinson offering single family lots, multifamily sites, commercial zoning for office, restaurant and retail. The plan calls for a 12-acre park, an elementary school, playfields and courts, walking paths, ponds, and green space.
Meyer Real Estate Group is focused and serious about establishing themselves in Dickinson for the long-term. “One hundred percent of our capital and effort has been invested in this one town.” Hart says, “As more trade starts to develop, as the people start to form a sense of place and move to the community, people become residents of this location and really embrace it.”
In early 2013, Hart and his family made their home in Dickinson spending the majority of their time there, while still spending some of his time back in the Twin Cities working with his partners. They have become involved in the community including the Badland Board of Realtors, the local chapter of the National Association of Home Builders, the Chamber of Commerce, the Dickinson Rotary Club and participate in many of the local activities. “We became residents in Dickinson,” Hart says. “We really saw how the family function works in this town, the city founders, the leaders, the giving back, the fundraising.”
As with any such venture, there remain concerns regarding the recent collapse in crude oil prices and slowdown of the oil industry growth. Hart insists this is no issue for Meyer Real Estate Group. “People over-reacted on the upswing and now they’re over-reacting on the downswing. North Dakota is a state built on commodities; commodities go up and down and western North Dakota remains a world class energy play.”
The shakeup, he says, allows them “to get caught up and push pause on projects we otherwise may have pursued or forced as a reaction to the market demands.”
Hart is encouraged, however, by the continued growth of activity on the operations side and the amount of young people and young families he sees coming into western North Dakota. “If they stay and hang on, they will do very well as it seems like the energy industry’s biggest initiative is to hang on to their workforce during this downturn; so they’ll be positioned for the rebound and long term sustainable growth.”
Meyer Real Estate Group is committed to seeing their plans through in any case. After all, Dickinson is where they “live, work and play.”