A Chicago/Milwaukee development duo is planning to convert the historic Jackson Building in the North Loop neighborhood in Minneapolis into a 120-room hotel with a restaurant/bar aimed at creating "an enclave for locals and appeal to travelers in search of an authentic, one-of-one Minneapolis experience."
The yet-to-be-named hotel could become only the second hotel in the North Loop is and is slated to be developed by a joint venture ( "300 Washington Avenue LLC") between Milwaukee-based Fe Equus Development, which developed the Iron Horse Hotel in Milwaukee, and the Aparium Hotel Group of Chicago, which will manage the hotel and restaurant/bar.
The dark red brick building has been a fortress-like presence at the bustling corner of Washington and Third Avenues since the very late 1800s and was at one time a farm implement showroom and warehouse. Even as the warehouses around it have been redeveloped, the five-story building has been vacant for years. Wayzata Partners was the most recent owner of the building, but their attempts to convert the building into 70 market-rate rental apartments failed and the building went back to the bank.
The 300 Washington Avenue LLC bought the 93,000 square-foot building at the end of July from MinnWest Bank for $4.6 million and is working with Twin Cities-based ESG Architects on plans for the conversion.To finance the project, the group plans to apply for historic tax credits, and says they've lined up a lender to finance construction. Plans have yet to be submitted to the city, but construction is expected to begin next year in time for a 2016 opening.
On Wall Street, U.S. economic growth is being offset by global woes, benefitting home buyers in an unexpected way: Fixed mortgage rates fell to new 2014 lows this week, according to a national survey by HSH.com. The average rate for a conforming 30-year fixed-rate mortgage, according to HSH.com's Weekly Mortgage Rates Radar, fell by four basis points to 4.15 percent with 0.17 average points. That's nearly a half percentage point lower than at the beginning of the year.
Here's how Keith Gumbinger, HSH.com's vice president, explains the situation: "Solid economic growth in the U.S. firms up mortgage and other interest rates, then concerns about growth, deflation and armed skirmishes around the globe find investors rushing to the safety and stability of Treasuries. As that money comes in, bond prices rise and yields fall, pulling mortgage rates down along with them...troubles around the world continue to be a mortgage shopper's best friend."
The average conforming 5/1 Hybrid ARM rates remained unchanged for a third-straight week at an average of 3.14 percent.
Home buyers in the Twin Cities outdid themselves last week. During the week ending August 23, there was 4.5 percent increase in pending home sales in the metro. Pending sales, an indication of future closings, have been down for much of the year because as investors exit the market and traditional buyers replace them. This was the first increase since July 5, but unlikely the beginning of a trend. Home sales this year are expected to fall short of 2013. Here's a link to the complete weekly report.
U.S. house prices, including distressed sales, are expected to increase 5.7 percent from July 2014 to July 2015, according to the latest CoreLogic Home Price Index.
The report also shows that house prices in the Twin Cities increased slightly slower than the national average during July, the rising 6.2 percent higher from last year and 1.5 percent higher than the previous month. Nationwide, annual prices were up 7.4 percent, the 29th consecutive month of year-over-year increases.
We'll have the lastest local numbers on August 12 when the Minneapolis Area Association of Realtors releases its monthly sales report, which I expect will show another decline in sales, and a moderate increased in home prices. Here some highlights from the CoreLogic report:
Here's a first look at the condo tower Jim Stanton of Shamrock Development wants to build at 8th St. and Portland Avenue in downtown Minneapolis. Stanton, always willing to take a chance, now owns the quarter-block site in the Eliot Park neighborhood just a couple blocks from the new Vikings Stadium where he plans to build a tower (designed by Oertel Architects Ltd in St. Paul) with about 15 floors and about 110 units.Though thousands of apartments are under construction in the city, only a couple solid proprosals have been presented. Stanton's plan has yet to make its way through the city and community approvals process, but Stanton is confident it will move forward this fall. He was the first developer to build new condos post-Recession in Minneapolis and the market responded favorably. At StoneBridge Lofts, which is along Gold Medal Park in the Mill District neighborhood along the Mississippi River, all but eight of the 164 units sold less than a year after the building was finished. Stay tuned for a full story in the Friday paper.
House prices in the Twin Cities and nearly every major metro in the country increased at a much more moderate pace during June, according to the latest S&P/Case-Shiller Home Price Indices.
In the Twin Cities metro, prices were up 6.7 percent compared with last year and just 0.6 percent compared with the previous month. On a seasonally adjusted basis, prices were down 2.3 percent from May to June.
A composite index of 20 metropolitan areas shows that from May to June prices increased 1 percent, but declined 0.2 percent on a seasonally adjusted basis. That index was up 8.1 percent compared with last year, but just 6.7 percent across the U.S.
It was the first time since February 2008 that all cities showed lower annual increases than the previous month, but the numbers were in line with expectations. Analysts say that more moderate price gains are a positive influence for the market because of the diminishing risk of a price bubble.
The closely watched report uses public records to track prices of single-family homes by comparing thousands of repeat sales of the same houses in each region.