Just Listed brings you the latest news and information from the Twin Cities-area commercial and residential real estate market and beyond from veteran reporters Jim Buchta and Kristen Leigh Painter.

City of Minneapolis hosts first public forum on Downtown East Commons park design

Posted by: Kristen Leigh Painter under Architecture, Vikings Updated: February 24, 2015 - 11:43 AM

The City of Minneapolis will seek the public's help in designing the new Downtown East Commons at an open forum Tuesday evening.

The 4.2-acre park is meant to be a fixture of the Downtown East redevelopment project by Ryan Cos. The developer will do basic soil and seed prep before turning the two blocks over to the city and its San Francisco-based landscape architect, Hargreaves Associates. 

Artist rendering of Downtown East Commons

Bounded by Park Avenue, 4th and 5th Streets and a proposed building that abuts 5th Av. S., the public space will have to balance a variety of interests.

"Hargreaves and the city’s job is to come up with a design for the Commons that is for almost everybody in terms of all the uses. And at the same time it has to be a clear, legible and compelling design that people get attached to and that it attracts the funds we need to sustain it in the future,” said Peter Brown, a consultant to the city. 

Minneapolis residents, workers and visitors can offer their input at Mill City Museum Tuesday, Feb. 24 from 6-7:30 p.m. And for those who prefer a more private response, the Hargreaves team has set up an online survey to gather feedback.

The park is currently a blank slate. Hargreaves hopes to capture and reflect Minnesota culture in its design.

"We really think this is a great opportunity for placemaking," said Mary Margaret Jones, senior principal at Hargreaves. "And, yes, we will be zoned. We have Ryan’s residential building at one end and the stadium at the other end. We can already imagine a park that moves from passive to more active. We are diving in. We are getting more information. We are understanding more of the special event needs. We are understanding the public.”

Jones has ties to Minneapolis. Her husband lived in the city when they first started dating. 

"I would come to visit and we would ride bikes along the river and across the Stone Arch Bridge, so I know the river well," she said. 

The challenge though for her and her team will be to satiate an abundance of needs. 

The Minnesota Vikings, Minnesota Sports Facilities Authority (MSFA), Metro Transit and Hennepin County are all stakeholders, in addition to the general public that wants leisure, recreational and artistic uses.

An agreement between the Vikings and the city gives the football franchise access rights to areas of the park on game days, as well as a number of other days. City officials are quick to point out that even on event days, the Commons will be open to the public while VIP tents, beer gardens or other ticketed space may be used exclusively by the Vikings or MFSA. Here's the agreement breakdown:

Western block: Up to 20 event days total

- 10 Vikings game days

- 10 Vikings other-event days

Eastern block: Up to 60 event days total, plus time that may be needed for setup and takedown

- 10 Vikings game days. Portions of the eastern block can be used the day before and after Vikings game days for the specific purpose of setting up and taking down tents.

- 10 Vikings other-event days

- 40 event days for the MSFA

To balance these diverse uses, “there will probably be some combination of soft and hard landscapes and probably some features, but we don’t know what those will be yet," Brown said. "It's going to be a blank sheet of paper. We want the public to tell us everything they think it's going to take to make it great. Hargreaves will then go away for 3-5 weeks and come back in early April with some big-idea sketches. Then we talk about those in public setting. Then, we narrow those down."

This is the first of three public meetings scheduled before the design is finalized in May.

The goal is to have the final park vision operational by the end of 2017, but an interim park will be completed in 2016 ahead of opening day at the new stadium. 

"Our goal is to make some improvements on Ryan's grass and seek in order to make a good interim park," Brown said. 

In order to realize this dream, Greening Downtown Minneapolis (GDM) -- a new nonprofit organization formed by the Minneapolis Downtown Council -- has to raise $18 million, which is Hargreaves' cost estimate.

Ryan Cos. has a vested interest in the park's success since its five-block residential, retail and office development will directly benefit from a vibrant park. The company kicked off the fundraising campaign by pledging $200,000, but GDM has a long ways to go.

"The land is owned by the city, but we have to raise all $18 million," Brown said. "We hope that there are some interested institutions and organizations that are going to see the benefit in supporting that work.”

 

Zillow home data shows a tale of two cities in January

Posted by: Kristen Leigh Painter Updated: February 20, 2015 - 4:43 PM

January presented a tale of two cities for the local housing market, and I'm not talking about Minneapolis and St. Paul.

The Twin Cities metro was one of only two major U.S. markets to see rentals rates drop in January compared to the same time last year, according to a new report from Zillow.

Nationally, rents were up 3.3 percent year-over-year in the first month of 2015 while the Twin Cities market experienced a -0.3 percent drop to $1,502. The only other city to see a decrease was Chicago. Our fellow Upper Midwest city in Illinois watch rental rates drop -0.5 percent year-over-year.

That's good news for renters, but perhaps discomforting for the multitude of apartment complexes under construction across the metro.

Meanwhile, Minneapolis-St. Paul's home values in January rose faster, at 5.9 percent, than the national average of 5.4 percent.

The median home is the Twin Cities has a value of $212,600 while the national median is $178,500. For comparison, Chicago's home values also grew, but at a much slower rate of 3.6 percent.

However, Mary Bujold, president of Maxfield Research in Minneapolis, cautions that Zillow's January Real Estate Market Report may not be a complete snapshot of the Twin Cities rental market.

"I'm certainly not worried about it," Bujold said."Yes, we are seeing minor modifications in some submarkets, but overall we are seeing an increase in rents."

In fact, Marquette Advisors' Metro Trends Report shows a 4.1 percent increase year-over-year for the fourth quarter of 2014, she said. 

Architecture Billings Index softens nationally in January

Posted by: Kristen Leigh Painter under Architecture Updated: February 19, 2015 - 10:24 AM

The Architecture Billings Index, a measurement of demand for design services, softened in January after a strong 2014. 

And while economists say the slowdown may be due to harsh winter weather, it is also concerning for the construction industry. The ABI indicates the level of new construction that can be expected in the next 9 to 12 months. 

"The easing in demand for design services is a bit of a surprise given the overall strength of the market over the past nine months," said Kermit Baker, chief economist for the American Institute of Architects, in a prepared statement.

The national ABI score for January was 49.9, down from December's 52.7. The index uses 50 to represent flat activity while anything about that is seen as an increase in demand for design servces.

Regionally, the Midwest fared a bit better with a score of 50.8. The South still had a strong month with 54.8 while the West and Northeast both dropped to 49.3 and 46.0, respectively. ABI's regional data is based on a three-month average ending in January.

"Likely some of this can be attributed to severe weather conditions in January," Baker continued. "We will have a better sense if there is a reason for more serious concern over the next couple of months."

First public meeting on Nicollet Hotel Block project attracts curious residents

Posted by: Kristen Leigh Painter under Architecture Updated: February 17, 2015 - 11:29 AM

Renderings of United Properties' Gateway Project, looking north down Hennepin Avenue at night

The Downtown Minneapolis Neighborhood Association's meeting Monday night served as the first public forum for the Nicollet Hotel Block project, attracting hundreds of residents.

Both the project architect, LHB's Bruce Cornwall, and Bill Katter, executive vice president of United Properties – the master developer on the ambitious plan – outlined the team's vision and fielded questions posed by residents. City Council member Jacob Frey was on hand to answer political questions about the city-owned parcel that has been the subject of an unusally high-profile development competition.

Here is a sampling a questions and answers from the meeting:

Q: Will the general public be allowed to use the large steps leading up to the hotel lobby?
A: "It will be a very public space," said Katter, who explained the design would siphon off pedestrians accessing the skyway to the public library so that it wouldn't disturb the hotel lobby, also at the top of the staircase.

Q: How witll the skyway connection fit into the whole system?
A: There are connection points built into the library that would facilitate skyways across 3rd Street, 4th Street and Nicollet Mall. The latter would connect to a "future development," said Frey. The block across the Mall from the library is known as the Ritz Hotel Block, which is also currently a surface parking lot owned by Opus Development Co. The Minnetonka-based developer is currently working with the City of Minneapolis on its plans for that site, which will likely be a mixed-use tower.

Q: How was the number of parking stalls determined?
A: "We estimate we can go down two levels (underground) before hitting rock," Cornwall said. He added that the city doesn't have too many requirements for the number of stalls, saying their one-stall-per-unit plan is more market-driven than based on regulations, and that the team wants to avoid any above-grade parking in order to maximize the public plaza.

Q: Why are these units apartments and not condos?
A: The answer is simple: litigation. Frey explained that Minnesota law maintains that condo owners can sue the building's developer for up to ten years after construction for any structural defects, even minor ones. This discourages developers from building owner-occupied units, Frey said, which is something he hopes to see changed in the city. Katter added that it's likely "a minimum of three years until this project is ready" and if the environment changes in their favor, "we will not rule out home ownership" for units in the tower.

Q: When will you make your final investment decision on this project?
A: "The final investment decision will happen this fall once we've completed our schematic designs," Katter said.

Q: One of the other proposals had Kare 11 committing to a studio in its building. Is there any thought to trying to get them to join your project?
A: "Nothing would make me happier than having the Twin Cities version of The Today Show sitting in a studio on this plaza," Katter said.

Rendering of United Properties' Gateway Project, aerial view.Katter debunked rumors that United was open to adding a dozen or more floors to its plan.

The team also revealed more design elements that are becoming evermore detailed as the team has more time to work on its drawings. 

A considerable amount of coordination is underway to help activate Cancer Survivors Park across the Mall from this site. The team is looking to place a performance platform, dubbed Upper Garden Plaza, on the edge of Cancer Survivors Park to draw pedestrians across the street, encouraging use of both public realms.

As for the oval ice rink in the middle of the public plaza, which could serve as a fountain in the summer, Katter and Cornwall are working to turn that into "skate trails" rather than the traditional circle so as to make the rink more interesting for users.

The team also revealed more details about The Canopy Hotel, a new boutique brand by Hilton. 

Hilton is being selective in its locations for the new chain, Katter said, as it wants the hotels located only in "great neighborhoods" where each Canopy is customized to fit the local environment. The Pearl District in Portland, Ore. and the South Loop in Chicago are a couple of the dozen or so locations planned.

Of course none of the details are final as feasibility studies, budgets and city approvals must still be addressed.

Rendering of United Properties' Gateway Project public plaza

Speculative Industrial boom hits Northwest Twin Cities strongest

Posted by: Kristen Leigh Painter Updated: February 16, 2015 - 5:08 PM
Source: Jones Lang LaSalle, Chart of the Week.

Source: Jones Lang LaSalle, Chart of the Week.

It's no secret industrial space is the hottest sector of commercial real estate in the Twin Cities, particularly  in the Northwest quadrant of the metro area, and Jones Lang LaSalle's chart of the week illustrates this deluge of construction.

Unlike the office market, Twin Cities developers are willing to take a risk by building industrial space on a speculative basis -- which means without securing a tenant first.

Not surprising, the area north and west of downtown Minneapolis is experiencing the greatest swell of activity, according to the chart, with 227,000 square feet of spec industrial completed last year and more than 1.8 million square feet currently under construction. The industrial boom is particularly along the I-94 and nearby highways.

Annual Best of BOMA Minneapolis Awards announced

Posted by: Kristen Leigh Painter Updated: February 13, 2015 - 6:28 PM

Greater Minneapolis Building Owners and Managers Association announced the winners of its annual Best of BOMA Awards at a gala Thursday evening. 

The event recognizes the top in property management, service providers and engineering and that keep Minneapolis' office buildings operating.

This year's ceremony took place at the McNamara Alumni Center at the University of Minnesota. Five individuals and eight buildings in the metro area were recognized.

The inviduals honored: 

  • Property Management Professional of the Year: Bob Traeger, CBRE, General Manager, 333 South Seventh Street
  • Engineer of the Year: Bill Schouviller, CBRE, Chief Engineer, 333 South Seventh Street
  • Emerging Leader of the Year: Jessica Lindquist, Shorenstein Realty Services, Assistant Property Manager, Washington Square
  • Service Partner of the Year: Christy Speck, Director of Business Development, Columbia Building Services, Inc.
  • President’s Award: Bruce Koehler, Hines, General Property Manager, U.S. Bank Plaza

The Outstanding Building of the Year (TOBY) Awards were:

  • Renovated Building: 330 South Second, owned by GPT Properties Trust and managed by RMR
  • Historical Building: Ford Center, owned by Ford United Tenant, LLC and managed by Cushman & Wakefield | NorthMarq
  • Medical Office: Tria Orthopaedic Center, owned by United Properties Investment, LLC and managed by Cushman & Wakefield | NorthMarq
  • Suburban Office Park (Mid-Rise): Southdale Office Centre, owned by Southdale Office, LLC and KADO Southdale Investment, LLC and managed by Colliers International
  • 100,000 - 249,999 Square Feet: One Southwest Crossing, owned by One Southwest Crossing and managed by Colliers International
  • 250,000 - 499,999 Square Feet: The Colonnade, owned by DRA Advisors, LLC and managed by CBRE
  • 500,000 - 1 Million Square Feet: AT&T Tower, owned by 901 Marquette, LLC and managed by Ryan Companies US, Inc.
  • Over 1 Million Square Feet: Capella Tower, owned by Minneapolis 225 Holdings, LLC and managed by Ryan Companies US, Inc.

And the 8500 Tower at Normandale Lake Office Park, which sold for a Twin Cities-record $369 million in November, won Xcel Energy's Kilowatt Cup, a competition between buildings for conversation the most energy.

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