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 Janet Moore.

North Nicollet Mall-area properties sold for $100M

Posted by: Janet Moore Updated: August 21, 2014 - 11:31 AM

A huge chunk of real estate near the northern stretch of Nicollet Mall has been sold to a San Francisco firm for $100 million, according to a source with knowledge of the deal who prefers to remain anonymous.

The properties, loosely known as Washington Square, include 20 Washington Square, 100 Washington Square, 111 Washington Av. S. and a parking ramp at 25 First St. N. They span about 1 million square feet of office space.

The distinctive mid-century 20 Washington Square building is currently leased to Voya Financial, formerly ING.

The buyer is Shorenstein Properties, a San Francisco-based real estate investment trust. In late 2012, Shorenstein bought the City Center complex, which includes the former International Multifoods Tower, a 50-story building occupies a city block bordered by Nicollet Mall, Hennepin Avenue and 6th and 7th Streets. That deal's pricetag was about $206 million.


 

Mortgage rates hit new low for the year

Posted by: Jim Buchta under Buying Updated: August 21, 2014 - 11:09 AM

Mortgage rates across the country dipped to the lowest level this year. Freddie Mac said today that the average 30-year fixed-rate mortgage averaged 4.10 percent for the week with an average 0.5 point compared with 4.58 percent last year, according to its weekly Primary Mortgage Market Survey. The previous 2014 low was 4.12 percent. Other rates this week:

  • The 15-year FRM averaged 3.23 percent with an average 0.6 point, down from 3.24 percent last week and 3.60 percent last year.
  • The 5-year adjustable-rate mortgage (ARM) averaged 2.95 percent this week with an average 0.5 point, down from last week when it averaged 2.97 percent and 3.21 percent a year ago.
  •  The 1-year ARM averaged 2.38 percent this week with an average 0.5 point, up from last week when it averaged 2.36 percent and 2.67 percent a year ago.

Low mortgage rates have certainly helped boost home sales. The National Association of Realtors said today that existing-home sales last month increased 2.4 percent to a seasonally adjusted annual rate of 5.15 million in July from a slight downwardly-revised 5.03 million in June. Sales are at the highest pace of 2014 and have risen four consecutive months, but are still 4.3 percent below the 5.38 million-unit level from last July, which was the peak of 2013.

Here's what Lawrence Yun, NAR's chief economist, had to say about the situation: “The number of houses for sale is higher than a year ago and tamer price increases are giving prospective buyers less hesitation about entering the market...more people are buying homes compared to earlier in the year and this trend should continue with interest rates remaining low and apartment rents on the rise.”

In the Twin Cities metro, home sales have been down compared with last year. Closings during July were down nearly 10 percent (not seasonally adjusted), according to the Minneapolis Area Association of Realtors. Pending sales - an indication of future closings - for the week ended August 9 were down 1.3 percent compared with last year.

Doran Cos. buys Bloomington building

Posted by: Janet Moore Updated: August 19, 2014 - 4:01 PM

Doran Cos. has purchased its headquarters building.

The Bloomington-based general contracting, development and management company said it bought the office building at 7803 Glenroy Road for about $2.2 million. The seller of the building was Paramount IV LLC. 

Various Doran entities now occupy 10,970 square feet of the 34,649 square foot three-story building. 

Other tenants include United Sugars Corp., S.S.C. Technologies Inc., Consultis of MN Inc., Selective Site Consultants Inc., Pennant Co. and other small tenants. The building is 80 percent leased.

Kelly Doran, principal and owner of Doran Cos. said that extensive interior and exterior renovations will begin immediately. In addition, a sign will be added identifying tenants to those travelling along busy W. 78th St. Both will result in “the finest little office building along the 494 strip," he said.

Renovations will include: New landscaping, parking lot asphalt, curbs. sidewalks and building signage; new HVAC systems; parking garage improvements including heat and ventilation; elevator, common area and restroom upgrades; new entry door systems, a building conference room and outdoor patio.

Building permits top $1 billion mark in Minneapolis

Posted by: Janet Moore Updated: August 18, 2014 - 2:40 PM

A short trip through downtown Minneapolis provides enough evidence to suggest a building boom, what with all the construction cranes and related activity. Some data released by the city on Tuesday appears to prove it.

This week, the city surpassed the $1 billion mark in construction projects for 2014. This is the third consecutive year that Minneapolis has reported more than $1 billion in construction projects approved since 2000. This is based on the value of permits issued for the year.

However, last year, the $1 billion mark was reached in October. And, the city said with additional submissions for development pending, there is a "high potential" for reaching the $2 billion mark this year.

"Driven by a high level of investment in commercial development, including the new stadium, and multi-family housing developments, the $1 billion in construction permits approved so far this year, speaks to our commitment to working towards creating a more vibrant Minneapolis that attracts increased investment and residents alike to the city," Minneapolis Mayor Betsy Hodges said in a statement.

Below is the total valuation of building permits in Minneapolis since 2000:

2000: $1.142 billion
2001: $975.8 million
2002: $889.2 million
2003: $852.2 million
2004: $944.7 million
2005: $855.2 million
2006: $839.6 million
2007: $761.3 million
2008: $772.5 million
2009: $778 million
2010: $547.6 million
2011: $752.8 million
2012: $1.118 billion

2013: $1.211 billion

2014: $1.211 billion (Aug. 14, 2014)

Much of the activity is in the eastern stretch of Downtown Minneapolis, with the new Vikings stadium and Ryan Cos.' proposed mixed-use development, Downtown East. Those two projects total more than $460 million to date in total valuation of building permits. The city said additional construction permits will be pulled from the two developments as they progress.

The construction boom for residential housing continues with permits issued for 1,488 dwelling units (single- family homes, new rental apartments and apartment conversions, and new condominiums) to date this year.  In 2013, 3,552 dwelling units were permitted, an increase of 249 units over 2012 levels and 2,936 units from 2011.

The number of apartment/condo units permitted in Minneapolis from 20011-2014 is as follows:

2011: 929

2012: 3,679

2013: 3,445

2014: 1,543 (Jan. 1 – June 30)

Here are the top five 2014 construction projects by building permit valuation in Minneapolis include the following. 

  1. Vikings Stadium valued at $241 million.
  2. Downtown East apartments and office tours located 550 S 4th Street, 600 S 4th Street, 510 S 4th Street, and 640 S 4th Street valued at $219 million.
  3. Wahu Student Housing located at 1000 Washington Av. valued at $64 million
  4. Latitude 45 apartment building located at 301 Washington Av. SE valued at $54 million.
  5. 15th Avenue Student Housing apartment building located at 501 15th Avenue SE valued at $37 million.

Best, worst cities for first-time homebuyers ranked

Posted by: Janet Moore Updated: August 18, 2014 - 11:54 AM

The Wallet Hub personal finance website has released this year's "Best & Worst Cities for First-Time Homebuyers." On this list, Minnesota doesn't rank all that highly.

WalletHub assessed the affordability of homes and conditions of the real estate market and community environment, in general. Seventeen key metrics, ranging from median house prices and real estate taxes to median home price appreciation and price-to-rent ratios were used. 

Of the 300 largest U.S. cities, the No. 1 city for first-time homebuyers is Broken Arrow, OK. The worst city was Richmond, Ca.

St. Paul ranked 201, and Minneapolis was 208.

The survey is here.

Cash home sales fall to the lowest level since 2010

Posted by: Jim Buchta under Buying Updated: August 14, 2014 - 10:20 AM

Cash sales in made up 34.4 percent of all home sales in the U.S. during May, the lowest share since May 2010 and down from 37.4 percent from the same month a year ago, according to CoreLogic.  In Minnesota, cash sales represented 25 percent of all closings.

Those cash deals been falling since January 2013. But prior to the housing crisis, the cash sales share of total home sales averaged about 25 percen after peaking in January 2011 when cash transactions made up 46.2 percent of total home sales.

Who's paying cash? Buyers of real estate owned (REO) listings were most likely to pay cash, the represented about 55 percent of all deals. Buyers of existing houses paid cash 34 percent of the time and short sales represented 32.8 percent of all deals. New home buyers paid cash only 16.8 percent of the time.

Here's where cash sales were most common:

  1. Florida: 53.4 percent
  2. New York: 50.3 percent
  3. Alabama: 48.9 percent
  4. West Virginia: 48.3 percent
  5. South Dakota: 46.3 percent

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