At the Lakes Residences on the north shore of Lake Calhoun, the sky is the limit when it comes to upgrades — and the rents.
Need a private catering kitchen? Check. Can’t live without a 48-inch stainless steel range with griddle? Check. And what about a 24-hour concierge? At your service.
With monthly rents that range from $3,500 to $13,000, it will be one of the most expensive places to live in the Twin Cities. And while it won’t open until this summer, more than 400 people have expressed interest in living in one of its 90 units.
Its developer, a South Carolina firm called Greystar, says it is trying to fill demand for rentals that don’t feel like apartments. Residents at the Lakes will have the same “lock-and-go” convenience of a typical rental, but the units will have the fit and finish of an upscale condo. The company describes the concept with the term “rental condominium.”
“It was designed for the empty nester who has designed their dream home and is leaving that dream home but still wants those finishes,” Greystar’s Sue Picotte said.
Greystar is debuting the concept in the Twin Cities and plans to duplicate it elsewhere, hoping to appeal to the big wave of baby boomers who are entering retirement age. Many of them may want to downsize from a big house in the suburbs to an urban rental that’ll free them up to hit the road at a moment’s notice. Some may also be looking for a less car-dependent lifestyle.
By contrast, most apartment builders design complexes with small apartments and lower rents aimed at young adults making their way up to homeownership. Of the more than 15,000 apartments that have been built in the region since 2010, 64 percent of them are studio and one-bedroom units, according to a report from the Twin Cities office of NAI Everest.
“A lot of rental properties have been positioned to appeal to the young millennial and they get a bunch of empty nesters who say, ‘We’re not done living, we want more space,’ ” said Tina Gassman, public relations director for the Minnesota Multi Housing Association. “It’s a market that’s underrepresented.”
While the average size of a new house recently increased to an all-time high of 2,690 square feet, the average apartment size was 982 square feet. The average unit size at the Lakes is 1,628 square feet and penthouses will be even bigger, up to 3,450 square feet.
All of the units were designed with features that are standard in a custom-built home, including tray ceilings and completely custom cabinets by the Woodshop of Avon, an award-winning cabinet shop in the western suburbs.
The apartments have also been designed for entertaining. Each has a powder room for guests and built-in wall ovens. Some have Wolf and Sub-Zero appliances. The building itself is being built to soundproofing standards that exceed what’s typical in many of today’s wood-framed apartment buildings.
And of course, residents will also have access to hotel-style service, include a round-the-clock concierge.
“People who can afford that, can afford to live here, want to have things taken care of for them,” Picotte said. “They want those niceties, but they don’t want to own it and be responsible.”
Gina Dingman and her husband, who moved out of their house in Inver Grove Heights two years ago for an urban rental, are moving into the Lakes because they want more room to entertain guests.
“I really wanted a place where we can have a real kitchen,” she said. “And if we have family and friends over, we have a place for a real table and chairs.”
She said they considered buying a condo but have grown fond of the flexibility of renting. “This is going to feel a lot like a condo but with less of a commitment,” Dingman said.
In the wake of the housing crash, people who wanted an upscale rental experience were able to tap into a deep well of individually owned condominiums that were owned by people who had a mortgage that exceeded the value of their units and wanted to wait for higher prices to sell. But with scant condo construction in the Twin Cities, those one-off rentals are getting difficult to find.
“There is a pent-up demand for true luxury housing,” said Brent Wittenberg, vice president of Marquette Advisors, noting that large units that can accommodate a family or a retiree who likes to entertain can be difficult to find.
Slowly, developers are waking up to the need. As 4Marq, a sleek new tower in downtown Minneapolis, was nearing construction, members of the marketing team began sensing the need for much bigger units. So they reduced the total number of units in the building and increased the size of several units, said Dan Lessor, a development executive with Mortenson.
The Twin Cities has an ample supply of high-end rentals, but any of the most expensive rentals on the market today were built more than 20 years ago and lack the kinds of amenities that are popular with today’s renters.
At the Calhoun Beach Club, which was built in 1999 and is next door to the Lakes, there’s a 3,335-square-foot unit that’s now on the market for $13,724 a month. In downtown St. Paul, there’s a privately owned penthouse condo that fetches more than $8,000 a month. And on Lake Harriet there’s a single-family house that’s on the market for $15,000 a month.
Mary Bujold of Maxfield Research noted that several local buildings have a penthouse or two that might compete with the Lakes, including Nic on Fifth and the Vintage on Selby, but none have such a concentration of high-end units. Across the metro, renters are paying on average $2 per square foot for some of the newer buildings, but residents at the Lakes will pay more than $3 per square foot.
“Rents like that are breaking new ground,” Bujold said.