Developer Schafer Richardson has dropped plans to turn a 96-year-old warehouse in Minneapolis’ North Loop district into a 60,000-square-foot office complex, and plans to construct a new apartment building at the site instead.
The two-story structure, commonly known as the Zuccaro’s Produce building, is located at 1000 N. Third St., just south and west of the intersection of 10th Avenue N. and Washington Avenue N., and situated next door to the Minneapolis Public Housing Authority’s main office.
Schafer Richardson paid $1.9 million for the property in May 2017. Shortly thereafter it put forward a proposal to renovate the existing building and add three more stories. The proposal was approved by the city’s Planning Commission that June.
This Thursday, the company is preparing to pitch a new plan for the site to the Planning Commission’s Committee of the Whole: Schafer Richardson now intends to raze the building and construct a six-story, mixed-use building called The Redwell in its place.
The Redwell would have 129 apartments, most of which would rent at market rates. The company is hoping to include 10 units that will be set aside for Section 8 recipients, said Maureen Michalski, Schafer Richardson’s director of development.
The Redwell will also have about 10,000 square feet of commercial space on the ground floor, which would probably be most suited to an office user, Michalski said, adding that demand for office stock in North Loop is still very strong.
Michalski said Schafer Richardson decided to change course after it became apparent that the Zuccaro building’s small footprint was a stumbling block. The floorplates are about 9,000 square feet, which made it difficult to nail down larger office tenants that can typically commit to long-term lease agreements.
“There are tenants in the market looking for smaller spaces. However, the challenge with new construction is meeting pre-leasing requirements for lending,” Michalski said. “We find right now that most small users are looking for available spaces three months out from when they need to be in a building. We would need tenants to commit a year in advance for a lease.”
Michalski added that the company was not motivated by what could be a glut of new office space entering the market.
Construction is already underway on Minneapolis-based Swervo Development Corp.’s new 500,000-square-foot office and retail development at 419 Washington Ave. N. A few blocks away, United Properties is going to put up The Nordic, a 10-story, 200,000-square-foot building at 729 Washington Ave. N. that will be mostly used for office space, though there will be an apartment component and street-level retail as well.
Construction on The Redwell will begin by the end of the year, and is expected to take 14 months to complete. Michalski declined to disclose the total development cost.
Anchoring the western side of the Seven-County Metro Area, Carver County can be overshadowed by its neighbors to the east: Hennepin County being the largest and largest-growing county in Minnesota, and Scott County being the fastest-growing county in Minnesota. Carver County, however, has a few surprises of its own to showcase.
According to the Minnesota State Demographic Center, Carver County had a population of 110,621 people in 2016, making it Minnesota’s 11th most-populated county. Chaska and Chanhassen were the county’s two largest cities as of 2016, with 26,439 people and 25,448 people, respectively. Altogether, just over 90,100 people live in Carver County’s 11 cities, accounting for 81.5 percent of the county’s total population. Just over 10,500 people reside in the county’s 10 townships, with Laketown Township being the most-populated (2,127 people). So Carver County is more populated than one might guess, being one of only 11 Minnesota counties with more than 100,000 people. This is despite being the state’s second-smallest county by total land area.
And Carver County is growing rapidly. Within the last decade of available data, between annual 2006 and 2016, Carver County’s total population ballooned by 16.7 percent, or about three times faster than total state growth. As such, Carver was Minnesota’s second fastest-growing county, only behind Scott County just to the east. This 16.7 percent growth was equivalent to approximately 14,400 new residents, placing Carver County 9th for the state’s largest-growing county during that period of time. Within the last year of available data, between annual 2015 and 2016, Carver County’s population grew by 1.8 percent, equivalent to just over 1,800 people. This made it the fastest- and sixth largest-growing county in the state during that time.
It should be noted that Carver County’s population is aging, a phenomenon occurring across the state and nation (Figure 1). In 2000, 7.5 percent of Carver County’s population was 65 years of age and older. As of 2016, 10.0 percent of the population was 65 years of age and older. Comparatively, 14.3 percent of all Minnesotans are 65 years of age and older. So while its population is aging, Carver County does have a slightly younger population than the state overall.
Carver County Industry Statistics
Manufacturing is the name of the game in Carver County. As of the third quarter of 2017, Carver County had 2,405 establishments supplying 39,332 total covered jobs. Nearly one-quarter of these jobs were in manufacturing. In comparison, manufacturing makes up about 11 percent of Minnesota’s total employment. The average annual wage for manufacturing jobs in Carver County, at $65,208, was about 29 percent higher than the average annual wage for the total of all jobs in the county, at $50,492 (Table 1). Two-thirds of Carver County’s manufacturing employment was within Computer and Electronic Product Manufacturing, Miscellaneous Manufacturing, Chemical Manufacturing, and Food Manufacturing. Clearly, manufacturing is significant and diversified in Carver County, offering jobs with high wages.
While manufacturing employment has witnessed some fluctuation in Carver County since 2000, employment increased by about 20 percent, or just over 1,600 jobs, between the third quarters of 2010 and 2017. Zooming out, total employment in Carver County increased by about 23 percent, equivalent to just over 7,300 net new jobs, during that same period of time (Figure 2).
While manufacturing has added the most jobs in Carver County since the recessionary low in 2010, many other sectors have also experienced significant growth. Health Care and Social Assistance gained the second most jobs in the county between the third quarters of 2010 and 2017 (+918 jobs), while Accommodation and Food Services, Educational Services, and Construction each gained about 800 jobs or more. Professional, Scientific, and Technical Services and Arts, Entertainment, and Recreation both grew by 64 percent during this period. (Table 1).
For More Information
Contact Tim O’Neill at 651-259-7401.
Master Properties is going to revamp the Troy Building, a 105-year-old structure in downtown Minneapolis’ Elliot Park neighborhood. The developer plans to turn it into 24 market rate apartments.
Minneapolis-based Master debuted the plan at a Thursday meeting of the Elliot Park Neighborhood organization’s Building, Land Use & Housing committee. Don Gerberding, principal with Master Properties, said the company is developing the property on behalf of the property owners, Ehab Elsayed and Amina Deble Elsayed, who will retain ownership once the project is done.
“The building has great bones,” Gerberding said. “It’s going to have tons of windows.”
The two-story brick structure at 731 14th St. E. was first used as a laundry, and parts of it remain untouched since that time. Some of the original business’ furnishings are in fact still at the site.
“We found a big safe in there with payroll checks dating from the 1920s to the 1940s,” Gerberding told the committee.
Most recently, the Troy Building housed a small food market, but the business closed in 2013.
According to plans, the units will range in size from 445 to 784 square feet, with a two alcove flats and 22 one-bedroom apartments. Gerberding said rents will range from $1,000 to $1,100. Some of the ground floor units will open onto patios, and one will have a private entrance.
The company plans to begin work this August. Golden Valley-based Benson-Orth will be the general contractor.
The Troy revamp is far from the only apartment project slated for Minneapolis. In just this week, three new proposals will go before the city planning commission’s committee of the whole.
A six-story building with 80 apartments, anchored by an 8,500-square-foot Good Grocer store, is planned for 2644 Nicollet Ave. S. The site is currently a surface parking lot.
Minneapolis developer Schafer Richardson is pitching The Redwell, a six-story mixed-use building with 129 units and 10,000 square feet of commercial space at 1000 N. Third St. The company is renovating the Zuccaro Produce building, which was constructed in 1922. The Redwell proposal apparently takes the place of Schafer Richardson’s earlier plan, which would have converted the structure into 61,000 square feet of office space.
And twin apartment buildings are on deck for the neighborhood just north of the Veterans Administration Medical Center.
Oaks Minnehaha would be the bigger of the two, a four-story 129,716-square-foot structure with 108 units ranging in size from studios to two-bedrooms. The building would go up on a vacant, 1.3-acre parcel that takes up about half of a triangular block bounded by the Blue Line Light Rail / Minnehaha Avenue on the east, 48th Avenue South on the west, and East 54th St. to the south.
Its smaller sibling, Oaks Longfellow, would be a four-story, 90,395-square-foot building with 68 units of housing. The building would also have 1,400 square feet of ground floor retail space, which would most likely be leased to a local coffee shop. The apartments would range in size from studios to two-bedrooms. It is planned for a vacant lot across Minnehaha Avenue to the south and east of its counterpart.
Purchase is St. Louis Firm’s Second Twin Cities Buy This Year
Altus Properties is adding to its growing Twin Cities office portfolio with the acquisition of Edina’s Edinborough Corporate Center, a 101,568-square-foot, seven-story building embedded in a mixed-use development on the city’s southeast side.
Clayton, MO-based Altus paid $14.45 million, or about $142 per square foot, for the property at 3300 Edinborough Way, according to a statement from the Minneapolis office of CBRE, which represented the sellers. The building was 91 percent occupied at the time of sale.
According to both Hennepin County records and those on file with the Minnesota Secretary of State, the selling group includes Denver, CO-based EverWest Real Estate Investors and entities tied to Columbus, OH businessman Todd Delay.
A spokesperson for Delay said he was unavailable to comment. EverWest CEO Rick Stone declined to comment on the ownership structure behind the building, which it purchased in December 2012 from American Realty Advisors for $10.47 million ($103 pSF), according to CoStar data, before bringing on DL Global in a $9.04 million 80/20 split of the ownership stake that valued the asset at $112 per square foot.
See CoStar COMPS #2624187 and #2833292.
The building is relatively old, having been originally built in 1986, but it has lots of amenities including a courtyard, fitness center with a pool and running track, and an on-site daycare center, to name a few.
In addition, Edinborough Corporate Center is part of a larger development that includes a 135-room Marriott Residence Inn hotel, a 203-unit luxury senior apartment complex and Edinborough Park, a one-acre indoor recreation facility owned and operated by the city of Edina. The park boasts a junior-Olympic size swimming pool, banquet room, a 250-seat Greek-style amphitheater, and “The Peak,” a maze of play equipment organized around a 30-foot faux oak tree. The park is extensively landscaped with real flora as well. Prior to opening day in 1987, the city outfitted it with thousands of trees and plants, which were reportedly brought up from Florida by a convoy of 14 semi trucks.
This is the second major office acquisition for Altus in the past month. In late March, the company paid $49 million for a portfolio of office properties on Minneapolis’ far east side. Altus did not immediately respond to a request for comment.
For its part, Edinborough Corporate Center was EverWest’s only holding in Minnesota. The company is interested in staying in the market, however, and is actively looking for properties in the Twin Cities region, Stone said in an email.
Please see CoStar COMPS #4215919 for additional information on this latest transaction.
PHOENIX, AZ (April 2, 2018) Ryan Companies US, Inc. Southwest Region announced today the promotion of Molly Ryan Carson to Senior Vice President of Real Estate Development, Market Leader. Ryan Carson has been a central leader in a number of high-profile projects in the region such as GoDaddy, McKesson, AMKOR Technology and Farmers Insurance.
In her new role, Ryan Carson will lead business development and real estate development for Ryan’s Southwest region. “Molly is well known for her strong relationships and active involvement in the local real estate community,” said Rick Collins Regional President Ryan Companies “She is a consistent model of and reinforces Ryan’s culture of excellence and commitment to our customers.”
Ryan Carson will continue to serve as National Executive Committee board member for NAIOP, Vice Chairperson of NAIOP Arizona, development advisory board member for the City of Phoenix and board member for Valley Partnership and Xavier College Preparatory.
MINNEAPOLIS, MN (April 2, 2018) Ryan Companies US, Inc. North Region announced today the promotion of Tony Barranco to Senior Vice President of Real Estate Development. Barranco has been a central leader in a number of high-profile projects in the region such as Downtown East, Vintage on Selby, and recently leading the Sons of Norway project in Uptown, Minneapolis.
In his tenure at Ryan Companies, Barranco has led or contributed to office, retail, hospitality, and multifamily development projects totaling over four million square feet with capitalized value of over $1B. Barranco has set himself apart in his work to coordinate complicated projects with users, neighbors, cities and key stakeholders to create positive outcomes and deliver comprehensive development solutions.
In his expanded role, Barranco will lead a multi-disciplined team of developers focused on the execution of mixed-use and corporate office projects in the North region. “Tony is highly accomplished and passionate about what we do for our customers and for the community,” said Mike Ryan North Region Market Leader. “He has established himself as a developer who can get challenging projects done with excellence.”
MINNEAPOLIS – February 26, 2018 – To continue a trend of growth and innovation, long-time mechanical/electrical engineering firm Michaud Cooley Erickson (MCE) has announced the appointment of five new shareholders.
Established in 1946, MCE is one of Minnesota’s oldest and largest mechanical/electrical engineering firms. It grew revenue by more than 14 percent in 2017 and currently employs 130 professionals in Minnesota. Its many high-profile projects include the Bioscience Building, the first development of the Discovery Square district of Destination Medical Center in Rochester, Minn.; many projects as the engineering firm of record at Minneapolis-St. Paul International Airport; and the new Bell Museum of Natural History at the University of Minnesota, among others.
Joining Doug Cooley on the shareholder team are longtime employees Eric Stelmack, Kerry Cooley Bruggemann, Jason Petermann, Jeff Clark and Greg Trende. Former President Dean Rafferty has retired after 43 years with the firm.
Cooley acknowledges Rafferty as a key player in MCE’s success. “His most significant contribution to MCE has been the solid foundation he built, preparing us well for continued growth,” he said. “Dean’s mentoring of our newest shareholders assures a smooth transition and continuation of the business model under which MCE is flourishing. We’re excited about the new leadership additions and look forward to continuing to deliver great service.”
Cooley, who holds the respect of industry leaders and has a reputation for quality and excellence in engineering design, assumes the presidency of MCE. As project principal, he has led the mechanical design team for many of MCE’s major projects in a variety of building types. He has provided leadership to the firm and has fostered many valuable relationships with clients. He is an expert in the area of energy-efficient design, sustainable design and LEED certification and has analyzed the cost benefits of energy management and retrofit programs for a wide range of market sectors.
Kerry Cooley Bruggemann has worked in the consulting engineering field since 2006. Her background includes the design of HVAC and plumbing systems for public, commercial, aviation, industrial, office and retail building projects. She has been involved in every aspect of the design process, from conceptual design to written specifications. Bruggemann also has performed detailed engineering studies with regards to energy savings technology and payback.
Eric Stelmack has practiced engineering for over 25 years, 22 of which have been with MCE. Stelmack is a principal in the Electrical department at the firm and maintains a professional focus in the area of modern building technologies, across all commercial sectors. In his tenure, he has been responsible for all aspects of client satisfaction, from project inception to final delivery. He administers the company Continuing Education program, delivering accredited educational seminars at numerous organizations and industry conventions. He is a published contributing author for professional engineering standards.
As a principal at Michaud Cooley Erickson, Jason Petermann is passionate about guiding the firm to provide the best mechanical and electrical design services possible. As a mechanical engineer, he understands the critical role of preparing outstanding technical documentation regardless of the building type. He excels at building strong relationships with clients and enjoys solving complex engineering challenges while maintaining the project budget and schedule.
Since joining MCE in 2005, Jeff Clark has led and managed the mechanical design of numerous mission critical, medical, corporate, higher education and public projects. He has extensive experience in the design of HVAC, plumbing and specialty systems for mission critical and healthcare facilities as well as fire protection systems. He determines and communicates project goals to discipline members and coordinates construction document development for the team to provide a consistent product and service.
Greg Trende’s experience includes healthcare and higher education, as well as science and technology. He especially enjoys the unique challenges associated with campus infrastructure systems. He has been with MCE since 2007 and in the industry since 1997. Trende is responsible for the development and management of a project’s scope, schedule and budget. He determines and communicates project goals to team members and coordinates document development with the team to provide a consistent product and service to MCE clients.
About Michaud Cooley Erickson
Michaud Cooley Erickson is one of the oldest and largest independent mechanical/ electrical firms in Minnesota. With 130 professionals at its sole office, located in downtown Minneapolis, MCE has worked for 13 of Minnesota’s 17 Fortune 500 companies. It is licensed in all 50 states, has more than 30 LEED-Accredited Professionals and is one of the Twin Cities’ leading consultants for sustainable energy. Its recent projects include, among others, the new Bell Museum of Natural History at the University of Minnesota and the Bioscience Facility of Destination Medical Center in Rochester.
Hoffman brings nearly 20 years of real estate experience to the Colliers MSP brokerage team, specializing in occupier solutions
April 3, 2018– Colliers International | Minneapolis-St. Paul is pleased to announce the recent addition of Tom Hoffman to the brokerage services team. Hoffman will work with the Colliers MSP brokerage teams to identify optimal tenant focused, occupier solutions for a wide range of Colliers MSP clients and prospects.
Hoffman, a former principle at Avison Young, brings nearly 20 years of real estate experience to Colliers MSP. Serving both on the commercial and residential side of brokerage, he began his real estate career with Coldwell Banker, specializing in multi-family and residential investment property re-development and sales. In 2010 Hoffman founded his own company, Victory Tenant Partners, a boutique Tenant Representation firm, that represented a broad and diverse range of clients.
“I’m excited to be joining Colliers MSP because of it’s local and international presence. This presence and the enhanced resources it affords me, will help me provide optimized solutions for my clients” states Hoffman.
“We are thrilled to have Tom join us at Colliers MSP. His leadership, market knowledge and energy will add great value to our entire team” says Bill Wardwell, Managing Director of Brokerage Services and Executive Vice President with Colliers International | Minneapolis-St. Paul.
Hoffman is currently the President of the Board of Governors at Temple Israel in Minneapolis. He is also a past board member of the Minneapolis Area Association of Realtors and is active on the Minnesota Commercial Association of Realtors.
By David Arbit on Wednesday, April 18th, 2018
From colder-than-average temperatures to a record-breaking snow storm, this spring has been anything but normal. While those searching for homes have seen more options since January or February, they’re still seeing fewer options compared to last year. That’s capped sales activity—particularly at the entry-level prices—and the lack of inventory combined with rising prices is encouraging some sellers to hold onto their properties.
In March, sellers listed 17.5 percent fewer homes on the market—the fifth consecutive month of declines compared to a year ago. Largely due to the shortage, closed sales declined 10.3 percent compared to the year prior. For-sale housing inventory was 26.1 percent lower than March 2017, the largest decline in over a year. This shortage has created a competitive environment where multiple offers and homes selling for over list price have become more common.
Sellers are receiving strong offers close to their original list price quickly, which can sometimes frustrate home buyers. New construction closed sales rose 13.1 percent compared to last March. Although single family homes made up about 74.0 percent of all sales, townhomes have enjoyed more resilient demand lately. Similarly, previously-owned homes made up about 89.0 percent of sales but new construction showed a much stronger increase in pending and closed purchase activity.
“We’re seeing some early evidence that the seller’s market could be starting to shift toward a balanced market,” said Kath Hammerseng, President of the Minneapolis Area Association of REALTORS® (MAAR), “When it comes to the long-term health of the housing market, that’s very much a good thing.”
March 2018 by the Numbers (compared to a year ago)
- Sellers listed 6,737 properties on the market, a 17.5 percent decrease
- Buyers closed on 3,978 homes, a 10.3 percent decrease
- Inventory levels for March fell 26.1 percent compared to 2017 to 8,289 units
- Months Supply of Inventory was down 22.7 percent to 1.7 months
- The Median Sales Price rose 9.8 percent to $258,000, a record high for March
- Cumulative Days on Market declined 21.9 percent to 57 days, on average (median of 22)
- Changes in Sales activity varied by market segment:
- Single family sales fell 9.8 percent; condo sales declined 10.0 percent; townhome sales shrank 9.6 percent
- Traditional sales fell 7.5 percent; foreclosure sales decreased 39.3 percent; short sales fell 47.3 percent
- Previously-owned sales fell 11.4 percent; new construction sales rose 13.1 percent
“Prices continue to rise while market times remain brisk,” said Todd Urbanski, President-Elect of MAAR. “This spring market is shaping to be more buyer-friendly than last year, it’s still a great time to get properties listed.”
Minneapolis-based CSM Corporation just finished construction on the second phase of its flex development in Brooklyn Park, MN, the 610 Commerce Center, but the company is already kicking around plans for a third and final building at the site.
General contractor RJ Ryan, of Mendota Heights, began construction on the building at 9350 W. Broadway Ave. last July. In late March, the company put the final touches on the 202,000-square-foot building said Ryan Bartley, CSM’s director of commercial development and investments. The structure is now 60 percent occupied, with about 80,000 square feet up for grabs.
On April 1, the label manufacturer Accraply Inc. moved into its headquarters from United Properties’ Plymouth Ponds Business Park to a 70,000-square-foot space at CSM’s new building.
Accraply was joined by Waukesha, WI-based Hallmark Building Supplies Inc., which is leasing 52,000 square feet in the building. Hallmark is moving from another CSM property, University Industrial Park III on the 2000 block of Elm St. SE in Minneapolis. Bartley said that Hallmark had gotten too big for its old location, which was only about 40,000 square feet in all.
The tenants themselves did not respond to requests for comment.
CSM declined to disclose the total development cost for Phase II. It completed Phase I of the 610 Commerce Center, at 7200 93rd Ave. N in 2015. The building is currently 100 percent leased to multiple tenants including BlackHawk Industrial, Point B Solutions, Scholastic Book Fairs and Varitronics.
Its proposed Phase III would entail a 100,000-square-foot building on the northwest side of the site. Bartley said the spot would be compatible with a user who wants a build-to-suit facility.