A rental-housing construction boom in the core cities is migrating to the suburbs, but location is crucial.
The apartment boom that has taken hold in Minneapolis is migrating to the suburbs.
Twin Cities developer Chris Culp is building the Flats at West End in St. Louis Park, part of a larger rental surge that will result in more than 1,100 units in areas outside the city.
The apartments are the first housing at the West End, a $400 million mixed-use development. Culp said its perks will rival some aspects of downtown living, with a grocery store, movie theater and bus line all within walking distance.
"Anybody looking for the ease of suburban living with the convenience of being in an urban setting will feel like it's a wonderful location," said Culp, of the Excelsior Group, adding that the West End's 119 luxury apartments will open next spring.
Renting outside Minneapolis and St. Paul has largely been limited to housing built decades ago, but experts say the suburbs are ripe for a new wave of apartment development, especially in mixed-use projects like the West End. It's a trend driven by a fundamental shift in attitudes toward renting plus a growing appetite for suburban rental housing with urban perks.
Experts say the number of units underway in the suburbs is the highest in more than two decades. Throughout the metro area, most of the apartments are upscale, renting from about $1.50 to $2 per square foot. At the Flats at the West End, rents will range from $1.70 to $1.90 per square foot.
The 40-acre West End site sits near a key transportation hub along the St. Louis Park-Minneapolis border in what was once an underused commercial area on the east side of the city. Its proximity to this corridor makes the development attractive for those looking for easy bus and highway access to downtown, Culp said.
Location a savior
Duke Realty launched the West End project amid the real estate downturn. But its prime location helped it attract several key retail tenants, including Rainbow Foods and Kerasotes Theatres. Today, the project is nearly built out, with housing being a major attribute.
"We're all excited to have it under construction," said Kevin Locke, community development manager for St. Louis Park. Adding housing is "a great complement to what's already there."
Such mixed-use projects aren't new, but they're creating opportunities for developers to create rental housing in the suburbs. Long before the West End, St. Louis Park had Excelsior & Grand, which was driven by housing development instead of offices and retail. With 600 condos and apartments and only 85,000 square feet of retail and commercial space, the 15-acre development was intended to primarily serve residents of St. Louis Park, while West End is being positioned as more of a regional attraction, Locke said.
Most new suburban apartments are in fully developed communities along key commuter routes. StuartCo is building the Genesee, a 200-unit building in a mixed-use development near Penn Avenue S. and American Boulevard in Bloomington. The company is also building 124 apartments called the View at Long Lake, which is part of the New Brighton Exchange redevelopment project.
Lisa Moe, StuartCo's president and CEO, said her company is being very strategic about where it's willing to build. The company is targeting sites in established suburbs with easy access to freeways, retail, restaurants and schools.
"Not everyone wants to live in the downtown or Uptown markets or among concrete," she said. "People like green space and the convenience of the suburban markets, as well as a convenient location to their place of work."
With the metrowide apartment vacancy rate now at about 3 percent and 1,500 rental units underway in Minneapolis, some say the suburban rental boom is just getting started. Beyond those buildings already under construction, more than 3,000 more units are at various stages in the development pipeline.
How many will actually get built depends largely on the economy and the timing of their completion.
That's why Culp, who envisions the West End Apartments as a place where residents won't have to get into their cars, is relieved that the units are under construction after a yearlong financing delay.
"I think there is going to be a sustained healthy demand for more apartments in good locations, whether those locations are suburban or urban," he said. "Still, we're trying as hard as we can to get to market as fast as we can."
Jim Buchta • 612-673-7376