Planning is underway to convert the historic Plymouth office building in downtown Minneapolis into apartments. Developer, Todd Phillips, says that he plans to buy the 260,000 square-foot building and convert it into 252 market-rate apartments aimed at serving people who work in city’s central business district.
The project is the latest in a long list of proposals to create thousands of new apartments in both new and existing buildings as developers take advantage of historically low apartment vacancy rates in the city. The sale is expected to close this summer after period of due diligence. Phillips said that he has a meeting with the neighborhood group next week and the property must be rezoned. He’s seeking financial assistance for absestos and lead-paint abatement, and expects to receive up to $12 million in state and federal historic tax credits.
Mary Bujold, president of Maxfield Research Group, said that in downtown Minneapolis and just across the Mississippi River 2,100 apartments are under construction. At 2.2 percent, apartment vacancy rates in downtown Minneapolis are among the lowest in the city. In Class B and C office buildings like the Plymouth Building, vacancy rates are more than 20 percent, making them ideal targets for conversion into other uses.
When built in 1910, the Plymouth Building was known as one of the largest reinforced all-concrete office buildings in the country. Recently, the main floor of the building was home to Wondrous Azian Kitchen, which has since closed. Phillips said that he plans to convert that space into two restaurants. Other first-floor tenants, including a hair salon and Lyon’s Pub, will remain. Phillips was involved with the recent conversion of the 430 Oak Grove building in the Loring Park neighborhood into upscale apartments. That project was led by Kraus Anderson, which will serve as a contractor on the Plymouth Building.
Phillips said that based on market demand for units at 430 Oak Grove, he’s planning to make 75 percent of the 252 units one-bedroom apartments with about 500 square-feet. Monthly rents will range from about $1,200 to $1,400 with occupancy anticpated in late 2014.