A 33-year-old businessman bought a four-story building so he can reshape the top floor into his 3,600-square-foot personal residence.
Minneapolis entrepreneur Nicolas Thomley, founder of social services provider Pinnacle Services, has embraced a new role: commercial property owner and future resident.
Thomley closed on a four-story, 111-year-old building at 106 N. 3rd St. in the Warehouse District last month. The 33-year-old ex-Marine and Augsburg College MBA says the $1.15 million purchase is part real estate investment strategy and part lifestyle choice. His plan is to convert the building’s 3,600-square-foot fourth floor into his personal residence, from which he will be able to survey the burgeoning Warehouse District scene.
It’s not Thomley’s first foray into building rehab projects. In 2008 he transformed a 99-year-old warehouse building at 724 Central Av. NE. into Pinnacle’s business headquarters, achieving “gold” certification under the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system for the effort.
“We looked for an opportunity in the Warehouse District for several years — we focus a lot of our efforts in this neighborhood,” he said. “We believe this to be the hottest neighborhood in Minneapolis. We’ve watched the development happen here and think it will continue until there’s literally nowhere left to do so.”
Thomley has made a mark on the city’s business scene at a young age.
He founded Pinnacle as a 19-year-old student at St. Cloud State University to provide vocational, residential and financial management services to seniors and people with disabilities. His first contract was with Hennepin County.
By 2006, he had made Inc. Magazine’s “30 Under 30, America’s Coolest Young Entrepreneurs” list, and by 2011 was on its Inc. 5000 list of the country’s fastest-growing companies with 2010 revenue of $14.2 million.
Thomley, who is also chairman of Pinnacle, says quick growth has cooled in recent years due to lower government reimbursement rates, primarily through Medicaid, as state governments work to balance their budgets. But, he added, the company has adapted through making acquisitions and other “creative strategies” to bolster revenue.
Meanwhile, his interest in real estate has picked up.
His new property, which straddles the corner of 1st Avenue and N. 3rd Street and is historically known as the Commercial Building, was designed by architect Charles Sedgwick in 1902.
It was constructed by a group of Minneapolis businessmen for rental office space and combines elements of the Art Nouveau style in its entrances with the Commercial style in its straightforward design and large window openings. The building was originally five stories tall, but the uppermost floor was lost to a fire in 1958. Despite its removal, the building retained its structural integrity.
Sometimes listed as 256 1st Av. N., the Commercial Building has a pair of anchor tenants: The Jackson’s Hole bar occupies the first and second floors and the After Midnight Group — owners of the Cabooze Bar and the Cowboy Jack’s chain of bar/restaurants — is on the third floor.
On the fourth floor, Thomley is working on what some Warehouse District fans might consider to be the ultimate residential condominium.
A visit to the space this week showed a work in progress, with contractors busy repairing a leaky roof and roughing in the outlines of the new residence. The unit’s huge windows will allow plenty of natural light and afford spectacular views of the heart of the popular entertainment district.
Thomley, who also owns a number of single-family homes and apartment buildings, says he’s still on the lookout for more real estate buys in the Warehouse District.
“Obviously, this is a big project, and we’ll need to get this one settled, but we’re certainly continuing to look to acquire additional properties,” he said. “This is just our second big commercial space and we’re pretty excited about it.”
Don Jacobson is a freelance writer in St. Paul and former editor of the Minnesota Real Estate Journal. He has covered Twin Cities commercial real estate for about 10 years.