Real Estate Transactions
Board of Regents approval is required for the purchase or sale of real property, or an interest in real property, having a value greater than $1,250,000 or larger than 10 acres.
To determine the value of the real estate to be purchased or sold, the Real Estate Office:
- Will obtain appraisals from two independent fee appraisers, preferably appraisers with Member of the Appraisal Institute (MAI) designation, when the value is anticipated to exceed $50,000, and one appraisal for other purchase or sale transactions.
- May use sale or appraisal data from similar properties when the value is anticipated to be less than $20,000.
Acquiring Real Estate
Prior to University 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 property and an evaluation of all improvements. During this due diligence phase, appropriate title documentation is provided by the seller to the buyer for confirmation the title for the property is in acceptable condition (i.e. the property 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 property 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 properties purchased.
Selling Real Estate
University real property must be designated surplus before offered for sale, except in the following instances:
- Property given to the University, when conversion to cash is consistent with the terms of the gift or bequest.
- Property taken by another agency through eminent domain.
- Property exchanged for other property of approximately equal value.
Surplus property is offered first to the State of Minnesota, and the county and the municipality or township within which the property is located. If not acquired by one of those governmental units, surplus University 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 property with a real estate broker. The sale method will reflect market conditions and characteristics of the particular property. Following a public offering in which no bid or proposal was accepted, property may be sold in a negotiated sale, provided the price is not less than the highest bid or proposal rejected.
In certain circumstances, property may be sold without a public offering:
- Sale to Other Governmental and Non-Profit Entities. Property may be sold to a governmental entity or a non-profit organization whose program complements the University's teaching, research and public service mission, as long as the price is not less than the appraised value.
- Abutting Property Owner. Property may be sold to an abutting property owner when the property is essential to the economic well-being of the abutting property owner, provided the price is not less than the appraised value.
- Less than $10,000. When the value of the property is less than $10,000, no public offering of the property is required.
The University reserves minerals and mineral rights when it conveys property.
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 the Statement of Owner of Real Estate Claimed to be Exempt from Taxation with the appropriate county and/or city offices for properties acquired and reports the acquisition or sale as appropriate within the University community.