Great Site on Mpls Condos/Downtown Living

Ok, remind me to check with this guy before I ever post anything again about condos in Minneapolis and/or living in downtown Minneapolis. Minneapolis Guy is Matt Loskota, an Edina Realty manager in downtown Minneapolis. He knows the downtown market, especially condos. Check out this Condo Count Report for all the deets on any townhouse, loft or condo building in or near downtown.

Some interesting information in the report:

(1) If I'm reading this right, there were about 3,000 units (townhomes, lofts and condos) in 30 buildings downtown before the recent building boom. The building boom added 4,700 units in 50 new buildings, for a total of 7,700 units in 80 buildings. In addition, there are about 500 units in 11 buildings near downtown, for a total of 8,200 units in 91 buildings. That's more than I would've guessed.

(2) There are plans for an additional 3,000-4,000 units (I thought I had heard 4,000 somewhere -- maybe in the forums at Minnescraper? -- but I'm not sure where). None are beyond the planning stage right now, but if they all were built, that would bring the total units to between 11,000 and 12,000 total in and near downtown Minneapolis. Wow.

(3) If 2008 absorption rates follow 2007 rates, there are approximately 11 months of previously owned inventory on the market now. I'm no real estate expert, but given the predictions for the economy, I have to believe that the 2008 absorption rate will be slower than 2007, so I'm guessing there is at least a year of inventory out there. In addition there are 2 years worth of newly built inventory available. That's a lot of units available, so I'm guessing the list of cancelled projects will continue to grow, and there will also be some projects that change from condo to rental or from residential to commercial. Already, that's what's rumored to be happening with a project in my neighborhood, 46th and 46th, where construction stalled last spring. Apparently the former luxury condo development will now be luxury rental development.

(4) There are 3,293 units in the Proposed Projects list, in 13 projects. At this point, it appears that 130 of those units are sold, leaving about 3,150 units in the proposed stage. That's a lot of units waiting for commitments. I'll be surprised if half of those actually get built.

This is a great list, and a terrific resource if, like me, you're interested in the downtown residential real estate market. I'm definitely going to follow the Condo Count Report every month. Nice work, Minneapolis Guy!

Another Downtown Condo Project Canceled

Downtown Journal reports that David Bernard Builders, a division of Rottlund, has terminated its development agreement with the City of Minneapolis and given up rights to a parcel of land along the riverfront, near the Guthrie Theatre. Here's the meat:

David Bernard Builders, a division of Rottlund Co., needed to sell 40 percent of the proposed 107 units to secure construction financing. The five-story project netted 16 sales and four reservations, and the sales center closed in the spring of 2007 after a little more than a year on the market.

The developer held on to the land rights for nearly four years before dropping redevelopment plans in January.

Michael Noonan, division president of Rottlund Homes, said one factor in the decision to cancel the project was city officials’ desire to designate about 30 feet along Chicago Avenue for open space that would preserve a view corridor to the Guthrie. He said they parted ways when the city refused to allow Rottlund to extend the development contract at no additional cost.

Crowther said the city does not have any immediate plans for the site other than to keep it clean and maintain the grass the developer has planted. She said city officials might offer the property back to the market in the future, but they have no plans at the moment.

This is the third lot on the riverfront that a condo developer has returned to the city. Brighton Development suspended plans last fall for the Portland, a five-story condo building at South 2nd Street and Portland Avenue, as well as Washington Live-Work at the corner of Portland & Washington, a site initially slated for condos and then commercial space. City staff have said they plan to eventually bring those sites back to the market for redevelopment.

Man, this condo shakeout was easy to predict. I think I read somewhere (but can't find the link now) that more than 4,000 new units were planned to be built between 2005 and 2010 in Minneapolis. No way that kind of condo development could be supported even in boom times -- this is a single-family housing kind of town. But for those of us who would enjoy the urban appeal of a downtown condo, it might be good news a couple years down the road, as it appears the condo market has already reached saturation.