Developer Pitches “Rental Condos”—What Are Those?
Call it the latest evolution of the apartment development boom: A large national developer is pitching a “rental condominium” project at the north end of Lake Calhoun in south Minneapolis.
What’s a “rental condo”? A very high-end apartment with condo-level bells and whistles. The units would be for lease, not for sale.
Charleston, South Carolina-based Greystar Real Estate Partners is pitching the 90-unit project on a currently vacant site at 2626 Lake Street West, just west of the Uptown retail area.
“It’s just designed to be more of a condominium quality development,” David Reid, senior managing director with Greystar told Twin Cities Business. “We would rent them.”
Reid said that the plan would call for condo-level finishes with larger units averaging 1,600 square feet in an eight-story concrete or steel building. Most local apartment projects feature wood-frame construction.
Past redevelopment plans have never moved forward on the site, where an office building once stood. Neighbors have been wary about building heights. The Minneapolis-based Lander Group was approved for a condo project with 46 units on the site in 2006, with heights ranging up to seven stories. The Lander project never moved ahead after the condo boom crashed.
Reid said that Greystar is trying to take a cue from Lander’s project as a guide to the scale of development that can be approved on the site. Reid said that Greystar has looked at approximately 20 different site plans for the parcel.
“We tried to design a building closely aligned with what was approved in the past,” Reid said. “I’m hopeful that we’ve done that. Obviously we’re going to let everybody take a look at and tell us what they think.”
Rents for the project are estimated at $4,500 per month, a price that would rank the Greystar project among the priciest local apartments. Reid acknowledged that the pool for top-tier renters is “shallow,” but said that they could be drawn to the “iconic” site. The site is next door to the Calhoun Beach Club Apartments, another luxury rental project.
The project will be up for discussion before the Cedar-Isles-Dean Neighborhood Association (CIDNA) on April 7. Matt Lindstrom, a spokesman for the city of Minneapolis, said that the city has not yet received any development proposal for the 2626 Lake Street West site.
Reid said that Greystar has a contract to buy the site and would ideally like to start construction in early 2015.
Minneapolis-based Marquette Advisors recently reported that apartment vacancy in the Twin Cities remains low at 2.5 percent, even amid the continuing construction boom of new projects.
Greystar is also the developer of Elan Uptown, one of the largest local apartment projects. At Elan, 203 units are already open; Greystar is adding another 388 units this year to the project along the Midtown Greenway.
“Minneapolis has a very strong occupancy rate,” said Reid. “I’m not overly concerned that the supply will overwhelm the demand yet.”