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.

Thresher Square project goes to City of Minneapolis with a few telling tweaks

Posted by: Kristen Leigh Painter under Architecture, Vikings Updated: February 5, 2015 - 4:58 PM

Minneapolis city officials will consider plans from Sherman Associates, that include some telling tweaks, next week for a Downtown East block called Thresher Square, which is adjacent to the Vikings stadium development. 

The mixed-use project calls for office, residential, hotel and retail on the same block as Old Spaghetti factory, between S. 3rd Street, Washington, Park and Chicago Avenues. 

But unlike its orginal plans, the latest iteration, posted to the city's website Thursday morning, has nixed plans for a skyway connection to the Minnesota Sports Facilities Authority ramp across S. 3rd Street. 

“The timing of the two projects didn't work out,” said Tony Kuechle, project manager at Sherman. "But residents can just walk across the street and enter the skyway."

The new documents make reference to a grocery store on the corner of Washington and Chicago Avenues. Speculation of a Trader Joe's has increased, but no official deal has yet been confirmed. 

“We needed to clarify grocer because it kicks in certain requirments for parking,” Kuechle said.

The site will combine historical reuse and new construction. Thresher Square is a historic brick-and-timber building facing S. 3rd Street that was converted into offices several years ago. However, the economic downturn hit its vacancy rates hard and Sherman is planning to turn it into a hotel with some office remaining. 

Since the building is a locally designated historic landmark and listed on the National Register of Historic Places, it may require review by the Heritage Preservation Commission, depending on the structural modifications. 

The Old Spaghetti Factory will remain as is with the restaurant and office uses.

All of the new construction sits on the southeast half of the plot. The seven-story, L-shaped building will total 185,000 square feet. In addition to the grocery store anchoring the retail, there will be a smaller commercial space facing Washington. The upper floors will be composed of 181 apartment units and amenity space. 

The Star Tribune has previously reported that Sherman hopes to make the apartments "affordable luxury," renting for about $2 per square foot, which is below the going rate at many of the other nearby luxury apartment buildings recently built.

Sherman plans to build two levels of underground parking with 275 stalls and is asking for a variance to include 80 grade-level parking spaces for the grocery store customers on the block's interior rather than the maximum 59.

Thresher Square proposalNew renderings for Thresher Square, looking northwest, submitted to the City of Minneapolis. Source: Sherman Associates and ESG Architects.

Foreclosure rate in the Twin Cities tumbles

Posted by: Jim Buchta under Foreclosures Updated: February 5, 2015 - 8:51 AM

There's another sign of stability in the housing market: Fewer people are falling behind on their mortgage payments. CoreLogic said the foreclosure rate in the Twin Cities metro during November 2014 was 0.51 percent, a decrease of 0.27 percentage points compared to November of 2013 when the rate was 0.78 percent. That's compared with a nationwide foreclosure rate of 1.48 percent during the same period.

There's also evidence the foreclosure rate will continue to declinine. Just 2.21 percent of mortgage loans were 90 days or more delinquent compared to 2.75 percent for the same period last year, a decrease of 0.54 percentage points. Not everyone who falls behind on their payment falls into foreclosure, but the measure is a good indication of whether foreclosure rates will rise or fall.

Declines in the foreclosure rates are the result of an improving economy and a healthier housing market. With fewer people out of work, fewer fall behind on their mortgages. And if even if that happens, higher home prices make it easier for them to sell before the foreclosure process begins.

Minnesota ranks in Top 10 for LEED-certified new

Posted by: Kristen Leigh Painter under Architecture Updated: February 4, 2015 - 6:06 PM

Minnesota made the top 10 list for new LEED-certified space in 2014, according to the U.S. Green Building Council's annual ranking.

Last year, Minnesota certified 39 projects totaling more 9.5 million square feet of real estate to LEED standards, the most recognized and widely used green building rating system.

The rankings are based on a per-capita square footage using 2010 U.S. Census data, with Minnesota certifying 1.79 square feet of LEED space per resident in 2014. This helped lift the state from its No. 10 position in 2013 to No. 9 last year.

Only commercial and institutional green buildings were calculated into the rankings.

"It is gratifying to see that Minnesota continues to be among the nation’s leaders in green building. This is a great celebration of the state’s leadership in advancing green building and of the hard work and dedication of USGBC Minnesota’s members and supporters,” said Sheri Brezinka, executive director of USGBC Minnesota Chapter, in a prepared statement.

Illinois claimed the No. 1 spot again with a per-capita ratio of 3.31. Colorado was close behind with 3.15 square feet per resident in 2014. Maryland, Virginia, Massachusetts, Hawaii, California and Georgia filled the next six spots before Minnesota, with Arizona and New York tying for No. 10.

The ranking entity says that LEED-certified buildings use less energy and water resources, save people and companies money and reduce carbon emissions.

Some notable projects mentioned in the Minnesota announcement:

  • Wells Fargo Center in Minneapolis, LEED Gold
  • The Xcel Energy Center in Saint Paul, LEED Certified
  • HGA Architects and Engineers MPLS Office in Greenbrush, LEED Platinum
  • Sage High Volume Manufacturing Plant in Fairbault, LEED Gold
  • Campbell Mithun Tower in Minneapolis, LEED Gold

Twin Cities housing developer gets a call out in speech by NYC mayor

Posted by: Jim Buchta under Architecture, Buying Updated: February 4, 2015 - 11:10 AM

Twin Cities-based Artspace develops affordable housing for artists, helping stabilize communities and planting the seeds for additional investment. City planners across the country have taken note, and have asked Artspace to bring their magic to their communities. Artspace is now working on several projects across the country, including New York City where the group recently completed the $52 million conversion of PS109, a once-abandoned public school building in East Harlem, into an arts facility with 89 units of affordable live/work housing for artists and their families. The project also includes 10,000 square feet of complementary space for arts organizations, and 3,000 square feet of resident gallery space. I wrote about the project two years ago (see the video and story by clicking here) just before construction began. This week that project landed front and center in New York Mayor, Bill De Blasio's state of the city address. Here's what he had to say about the project.

A before and after shot of an El Barrio corridor.

A before and after shot of an El Barrio corridor.

Jim Durda leaves IDS Center to join Zeller Realty as executive vice president

Posted by: Kristen Leigh Painter Updated: February 4, 2015 - 9:52 AM

After 21 years managing the IDS Center, a Twin Cities landmark, Jim Durda is joining Zeller Realty Group as Executive Vice President of the Minneapolis office.

Durda is well-known in the local commercial real estate community with more than 30 years experience. He most recently served as vice president, asset manager and general manager at Accesso, a Florida-based real estate firm that owns IDS -- the sixth owner under Durda's watch.

He will oversee the Twin Cities portfolio of Chicago-based Zeller, which includes a number of downtown and suburban office buildings, like the recently sold Fifth Street Towers and LaSalle Plaza in Minneapolis' central business district, as well as Wells Fargo Plaza in Bloomington, Edina Corporate Center and Wells Fargo Place downtown St. Paul. 

Jim Durda

“Jim is very well respected in the industry and we are confident his experience and expertise will benefit our clients as well as our team,” said Paul M. Zeller, Managing Principal and CEO of Zeller Realty Group, in a prepared statement. “Jim’s understanding of the market, depth of relationships, as well as his focus on providing first class service to tenants makes him an excellent addition to our organization.”

Durda has been a Minneapolis Downtown Council board member for nine years, and served as president of Building Owners and Managers Association (BOMA) in 2008, has been a member of the commercial real estate development association, NAIOP, since 1984.

“It is an exciting time in the commercial real estate industry in Minneapolis and I am looking forward to joining the Zeller team to enhance our current offerings and also grow our portfolio,” Durda said, in a prepared statement.

Before his post at IDS, Durda worked for United Properties, Woodbridge Properties and the Xerox Crop. 

The Frappuccino effect: A Starbucks in the 'hood can boost home values

Posted by: Jim Buchta under Buying Updated: February 3, 2015 - 1:47 PM

Here's another little something homebuyers should consider when considering the location, loction, location of their dream home. A pair of housing experts from Zillow.com said recently there's a correlation between your proximity to a Starbucks and your home value, and that your house is worth more if you're closer to Starbucks than to a Dunkin' Donuts shop.

In an excerpt from "Zillow Talk: The New Rules of Real Estate," Zillow CEO Spencer Rascoff and chief economist, Stan Humphries, say that a house that's within a quarter mile of a Starbucks would have sold, on average, for $137,000. A home that is not near a Starbucks would have sold, on average, for $102,000. Fast-forward 17 years to 2014. That average American home has now appreciated 65 percent, to $168,000. But the Starbucks-adjacent property has far outpaced that, appreciating 96 percent to $269,000 and slightly more than houses located near a Dunkin' Donuts shop.

What gives? Will buyers pay more for proximity to a double chocolaty chip crème Frappuccino blended crème, or is it simply a sign that residents can afford to blow $4.95 on their morning pick-me up? Rascoff and Humphries attribute some of the increase to the tendency of Starbucks to locate their stores in upscale neighborhoods.

"Whatever the reasons—because they genuinely like drinking coffee, or because they see Starbucks as a proxy for gentrification—it seems pretty clear that people are paying a premium for homes near Starbucks," the authous said. "And furthermore, it looks like Starbucks itself is driving the increase in home values."
 

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