Board of Regents approval is required for the purchase or sale of real estate, (i) having a value greater than $1,000,000, (ii) located on or within 2 miles of a University campus, or (iii) larger than 10 acres.
To determine the value of the real estate to be purchased or sold, the Real Estate Office will utilize the following thresholds:
- If the value of the real estate is anticipated to exceed $250,000, or if the value of the real estate is anticipated to be between $50,000 and $250,000 and is also subject to Board of Regents approval, two appraisals will be obtained from independent fee appraisers, preferably with a Member of the Appraisal Institute (MAI) designation.
- If the value of the real estate is anticipated to be between $50,000 and $250,000, one appraisal will be obtained from an independent fee appraiser, preferably with a Member of the Appraisal Institute (MAI) designation.
- If the value of the real estate is anticipated to be less than $50,000, sale or appraisal data from similar properties may be used to estimate the value of the real estate.
Acquiring Real Estate
Prior to the University’s purchase of real estate or acceptance of a real estate gift, appropriate due diligence is completed, including an environmental investigation to confirm acceptable environmental condition of the real estate and an evaluation of all improvements. During this due diligence phase, appropriate title documentation is provided by the seller/transferor to the University for confirmation that the title for the real estate is in acceptable condition (i.e. the real estate can be used for the University’s intended purpose(s)). For University real estate purchases (and construction of buildings on University land), the University is obligated to consult with the Minnesota Legislature and obtain an advisory recommendation.
The University may acquire real estate by use of its eminent domain power pursuant to the Eminent Domain policy if authorized by the Board of Regents.
The Real Estate Office handles any required relocations resulting from real estate purchased.
Selling Real Estate
Before offering real estate for sale, the Administration must determine that the real estate is no longer needed to fulfill the University’s mission or the disposition of the real estate better meets the University’s needs or better supports the University’s mission, except in the following instances:
- Real estate given to the University, when conversion to cash is consistent with the terms of the gift or bequest
- Real estate taken by another agency through eminent
- Real estate exchanged for other property of approximately equal
Real estate identified for disposition is offered first to the state, county, municipality, township, or other governmental entity within which the real estate is located. If not acquired by one of those governmental units, the real estate is then offered for sale to the public, either via an Invitation to Bid or a Request for Proposal process managed by the Real Estate Office, or by listing the sale of the real estate with a real estate broker. The sale method will reflect market conditions and characteristics of the particular real estate. Following a public offering in which no bid or proposal was accepted, real estate may be sold in a negotiated sale, provided the offer is comparable to the best valued proposal rejected. Following a public offering in which a proposal is initially accepted and then subsequently terminated, real estate may be sold in a negotiated sale, provided the value of the proposal is greater or comparable to the value of the accepted proposal that was terminated. In either case, the value of the proposal will consider factors including but not limited to: price, timing, environmental considerations, or buyer contingencies.
In certain circumstances, real estate may be sold without a public offering:
- Sale to Other Governmental and Non-Profit Entities. Real estate may be sold to a governmental entity or a non-profit organization whose program complements the University's teaching, research, and outreach mission, provided the price is not less than the appraised
- Abutting Property Owner. Real estate may be sold to an abutting property owner when the real estate is essential to the economic well-being of the abutting property owner, provided the price is not less than the appraised
- Less than $50,000. When the value of the real estate is less than $50,000, no public offering is required, provided the real estate has been advertised on the University’s website, and the purchase price is not less than the estimated value.
The University reserves minerals and mineral rights when it conveys real estate.
Working with the Office of General Counsel, the Real Estate Office ensures that all relevant conditions outlined in the purchase agreement have been satisfied prior to closing, such as environmental investigations, surveys, title reviews, building evaluations, and necessary approvals.
The Real Estate Office represents the University at the closing of a University purchase or sale of real estate. In coordination with the Office of General Counsel, deeds and any supplemental documents are prepared or reviewed. At closing, the Real Estate Office verifies payment or receipt of sale proceeds, orders title insurance, ensures payment of appropriate real estate taxes and special assessments due at closing, and ensures conveyance instruments will be recorded.
Following the closing, the Real Estate Office files for property tax exemption with the appropriate county and/or city offices and reports the acquisition or sale as appropriate within the University community.