Boutique condo plan floated in Minneapolis’ North Loop
Posted: 7:25 am Tue, February 19, 2013
By Burl Gilyard
Rare pitch for area dominated by rentals
The North Loop area of downtown Minneapolis is one of the busiest sections of town for new apartment development. But now for the first time since before the recession, plans are being floated for a for-sale condominium project.
Joe Grunnet and Kevin Mullen of the Downtown Resource Group, a firm focused on buying, selling and leasing downtown Minneapolis condos and lofts, presented a concept for converting the vintage Western Container building at 500 Third St. N. to condos at the Jan. 23 meeting of the planning and zoning committee of the North Loop Neighborhood Association. The boutique concept appears to be in the early stages and calls for 20 to 24 condo units.
“The proposal is to renovate the existing building, to add on top of it, to convert to condominiums,” said David Frank, president of the North Loop Neighborhood Association, who noted that the plan calls for commercial space on the ground floor. “They see that that’s a need in the market that is not being filled.”
The Western Container building dates to 1908, but has been vacant for several years, Frank said. The proposal calls for adding one story to the four-story building. The CoStar Group property database lists the building at 18,810 square feet.
Construction cranes are common today in the North Loop. Finance & Commerce is currentlytracking 862 apartments under construction in the North Loop area and another 545 proposed apartment units in the neighborhood.
But a condo conversion project would be unusual. Only a handful of condo projects are in the development pipeline in the Twin Cities.
Frank said that DRG representatives have indicated that they were representing the building owner. Property records show that the building is owned by Minneapolis-based Swervo Development Corp., which is headed by Ned Abdul. Frank said that he did not know who the developer for the project would be.
Grunnet declined to comment on Monday, deferring to the property owner. Abdul, a prolific real estate investor, did not return a phone call seeking comment.
Frank said he believes that DRG has a good sense of the current downtown condo market, because that’s their business day-in and day-out.
“I think it’s telling that the people who are hoping to make it happen are in the market,” Frank said. “The thing that North Loop dislikes the most are cool buildings sitting vacant. Whether it’s for sale or apartments, I would say the neighborhood’s indifferent.”
Property records show that Swervo Development acquired the building in August 2005, as part of a $6.75 million deal including other properties. Frank said that the other properties were developed into Herschel Lofts and Harvester Lofts, both condo projects.
The Western Container building has a current assessed value of $1.15 million, according to Hennepin County property tax records.
“It was a very good-looking building that they showed us,” Karen Lee Rosar, vice president of the North Loop Neighborhood Association, said of the renderings.
No vote on the project was taken at the neighborhood committee meeting. To move forward, the project will ultimately need city approvals and need to be considered by the city’s Heritage Preservation Commission.
“We strongly encouraged them to move forward, but they’ve got to go to HPC,” said Rosar, who is a member of the neighborhood’s planning and zoning committee.
The Western Container project appears to be the fourth condo project currently in the pipeline across the metro.
Coon Rapids-based Shamrock Development is under construction on the 164-unitStonebridge Lofts near the Guthrie Theater in downtown Minneapolis. Developer Jim Stanton of Shamrock did not return a phone call seeking comment. Stanton has previously told Finance & Commerce that he was moving ahead with the project as the supply of downtown condos for sale dwindled.
The website for the Stonebridge Lofts project indicates that 32 units have been pre-sold and that another 9 units have been reserved. The project is slated for completion in May 2014. Prices are listed from $250,000 to $1.2 million.
In the western suburbs, Wayzata-based BohLand Development is planning 63 luxury condosas part of the mixed-used Promenade of Wayzata project.
Developer Mark Dwyer continues to push plans for a condo project in the Linden Hills neighborhood of south Minneapolis. The latest revised version of the plan has a new name, Linden Crossing, and has been trimmed to 16 condo units which will be priced from $650,000 to $1.4 million.
The project was approved for 18 units, but Dwyer said that 16 units is a better fit for the project’s design. Dwyer is confident in the depth of demand for condos in the affluent area.
“Our approach is to build it once they’re all pre-sold,” Dwyer said. “It’s a little contrarian to go condo now, but there’s still a strong group of people out there who prefer to buy.”
Herb Tousley, who heads real estate programs for the University of St. Thomas, said that the activity may suggest a subtle market shift.
“I think we’re starting to see the beginnings of that [condo] market starting to come back,” Tousley said. “It’s something we haven’t seen for a long time.”