Union House sold to PRE/3 Real Estate Management

By Travis Fischer, tkfischer@charlescitypress.com

Union House is under new ownership.

After four years of being owned and operated by First Security Bank associates, the high profile Main Street apartment complex has finally been sold.

“We’re very happy to have this through,” said Kurt Herbrechtsmeyer, who along with until recently serving as First Security’s president and CEO, has also managed the operation of Union House.

“We operate a bank, we’re not commercial property owners. This is not what we’re supposed to be doing,” he said.

Originally known as McQuillen Place, the multimillion dollar project suffered years of development delays and lawsuits before ultimately being acquired in federal bankruptcy court in April of 2020 by Four Keys LLC, a holding company formed by Cedar Valley Bankshares, the company that owns First Security Bank.

The building was finally completed and welcomed its first residential tenants in December of 2021.

“It’s been a learning experience for me,” said Herbrechtsmeyer. “I’ve become a part-time plumber, among other things.”

Operating the apartment building in the long term was never Herbrechtsmeyer’s intentions, he said.

While he’s learned a lot about property management in the last four years, such as how garbage pickup works and what it takes to buy refrigerators in bulk, that’s not Herbrechtsmeyer’s area of expertise and, more importantly, bank regulators don’t like banks operating commercial properties, he said.

Going for $2,425,000, the property was sold at a loss for the bank, which was not unanticipated.

“I don’t think we ever expected or intended to make money from it, and we didn’t,” said Herbrechtsmeyer. “You can’t make market rate housing and easily make money. The cost of construction is just greater than the value.”

Nevertheless, Herbrechtsmeyer said he is glad to see the property now in the hands of a dedicated property management company and is confident the new owners will do well in Charles City.

“I would say the vibe we’ve gotten has been good,” he said. “They know what they’re doing. They’re going to be a good landlord.”

“We’re just delighted to be in the community,” said Meg Anderson, a brand strategist with Premier Real Estate Management, the property management division of PRE/3.

Based out of Brookfield, Wisconsin, Premier Real Estate Management operates more than 17,000 units across 16 states, including Iowa complexes in Mason City, Clear Lake, Iowa Falls, Grundy Center and more.

“We were really attracted to Charles City’s rich history and friendly community,” said Anderson. “Our investors are always interested in purchasing or building in areas that have a strong workforce and a good community of people that could use the housing opportunity.”

Premier Real Estate Management has already built a new website for the building and hired on-site management, but for residents of the building the change of ownership is not expected to dramatically change the status quo.

“We think it’s a lovely property in a beautiful community,” said Anderson. “Don’t expect to see many changes.”

On the other hand, now that the building sale has finally been completed, Herbrechtsmeyer said he hopes that potential commercial proposals for the first floor space will start to move forward.

“We had two small spaces we were working with and one larger one and those are moving to the next step of negotiating,” said Herbrechtsmeyer. “I would expect we should see some preparations for the new tenants in the next couple months.”