Aveda founder Horst Rechelbacher spent nearly $7 million to buy the top two floors of a Minneapolis condo building. It could give the market a lift.
On Saturday night, Aveda Corp. founder Horst Rechelbacher threw an extravagant bash for his 70th birthday by featuring Irish pop star Donovan and an invocation by four Buddhist monks. He also celebrated the party venue: his new, 18,000-square-foot Minneapolis condo overlooking the Mississippi River.
Rechelbacher, owner of Intelligent Nutrients, recently bought the entire top two floors of the Phoenix on the River condo building and plans to convert them into what is thought to be the largest and most expensive condo in the state. He paid $6.995 million for the unfinished space.
Even bigger than the condo deal is the psychological lift it is giving the market. Condo sales have suffered because of economic fears, but the Rechelbacher purchase and a spate of other upper-bracket deals are signs the condo segment is improving.
"There are excellent opportunities in the market and for those buyers who have a longer-term perspective, these purchases represent "once-in-a-lifetime" opportunities," said Barry Berg, the Coldwell Banker Burnet agent who along with business partner, Chad Larsen, represented Rechelbacher in the deal. "We're seeing evidence of pent-up demand as many buyers are looking more seriously at purchase opportunities."
So far this year, there have been 23 sales of $1 million-plus condos and townhouses in the metro area, a 109 percent increase compared with last year. This was the biggest increase in any price category, with most of those sales happening in Minneapolis.
The Phoenix is an 18-story tower near the foot of the Stone Arch Bridge across the river from downtown Minneapolis. The space he bought was originally intended to be divided into three, two-level penthouse units that would have gone on the market for a combined $10.5 million once finished. Together, the three units would have had 12 bedrooms, 14 bathrooms and 12 parking spaces.
The developer, Schafer Richardson, was offering them unfinished so that buyers could make their own choices. For Rechelbacher, getting the raw space was a selling point. He'll do a custom build-out that will include a lab space where he can work and plenty of studio space to pursue his creative endeavors.
"I always like to work out of my living space. I do it in New York and I plan to do the same thing in Minneapolis," he said.
Rechelbacher sold Aveda, a cosmetics and skin-care company, to Estee Lauder in the late 1990s for an estimated $300 million. Since then, he has shifted his focus to Intelligent Nutrients, a company that specializes in organic, nontoxic health and beauty products. He is the founder and CEO of the firm.
Rechelbacher is no stranger to downtown Minneapolis -- or to interesting urban spaces. His new place is only a few blocks from the building that now houses the Aveda Institute. He lived in the third floor of the Van Dusen mansion, a pink granite castle in south Minneapolis where the Aveda Institute was once located. He also had a penthouse apartment at the Itasca Building, one of the first historic condo conversions in the city.
His new condo at the Phoenix will also offer him enough space to house the many visitors who come from around the world to consult on his new products, and he'll have plenty of room for his many dogs. He has 13.
Rechelbacher doesn't have a timetable for when he will build out his new space, but he said it will happen in conjunction with the design and creation of a new Intelligent Nutrients concept store that he is planning to open at the Mall of America. The store will become a testing ground for 200 stores he expects to open elsewhere around the world.
The design of both the store and the condo will be done by a Minneapolis architecture firm called U+B architecture & design, which also designed his New York condo. Both projects will be designed in a nontoxic, sustainable way.
Already Rechelbacher is flexing his creative muscles. On the night of his birthday party, stacks of drywall became tables. Thousands of flickering candles lined the terraces and tabletops.
But the move doesn't mean Rechelbacher is giving up on his 600-acre farm in Osceola, Wis., which he has owned for almost 25 years. He still calls that place home and intends to use it to grow more of the ingredients that go into his products. But he also spends considerable time at a penthouse apartment atop a Manhattan Fifth Avenue building, which, like his place at the Phoenix, has excellent river views.
"It's a joy having a nice view," he said.
Like other empty-nesters, Rechelbacher said the purchase was largely motivated by an interest in giving up his long commute and a desire to spend more time in the city. At Phoenix, he'll be just blocks away from Intelligent Nutrients in northeast Minneapolis.
"Now I can walk to work and take the bicycle," he said.
Rechelbacher got outbid on a penthouse condo that had been on the market for about $3.5 million that had recently been reduced by about $1 million. That's when he toured the top two floors of the Phoenix, and decided on the spot to make an offer.
"I immediately knew this was the space," he said.
Fritz Kroll, the Edina Realty agent who led the sales team for Phoenix developer Schafer Richardson, is relieved to have only three unsold units in the building. He also said the deal is a boon for the broader housing market.
"I do think people like to see others choosing to invest where they did," he said. "This isn't just a big deal for the Phoenix, it's a big deal for downtown."
Jim Buchta • 612-673-7376