Horst’s Record Setting Residence

Does the mega-purchase mean the condo market is back?

Horst Rechelbacher made headlines this fall when he paid a record $7 million for condo space at the Phoenix on the River building on Minneapolis’ East Bank, leading some to wonder if the intuitive entrepreneur sees something ready to bubble up in the stigmatized condo market.

Rechelbacher, founder of beauty and skin-care companies Aveda Corporation and Intelligent Nutrients, bought three unfinished units (the most expensive of which was nearly $2.4 million), marking the largest high-rise condo unit purchase in Minnesota history. (The record local sale for a single high-rise unit is $3.5 million.)

“Realtors were delighted and a bit surprised” says Scott Parkin, who owns Hoffman Parkin Urban Realty in Minneapolis and specializes in the luxury end of the market. “Horst is an outside-of-the-box thinker.”

Yet Parkin isn’t sure it heralds a trend. “I think the condo market—especially the luxury market—is still very young,” he says. “Minnesotans have a very cautious approach and are unwilling to spend a lot on what some still consider to be a fad or untested.”
Rechelbacher’s purchase was unusual in terms of both price and size. “My luxury market is between $700,000 and $1.2 million,” says Parkin. Since the market for luxury high-rises hasn’t fully recovered, Parkin believes prices will remain flat for awhile more.

However, Brady Kroll—a Minneapolis-based realtor with Edina Realty on the sales team for the Phoenix—believes that once the market picks up, it will do so very quickly: “Although prices are certainly down over the last few years, so is inventory, especially high-end, new-construction.”