Thousands of rental apartments have been built in the metro area over the past decade, but few developers have been willing to tackle for-sale condominiums.
And the latest is a small addition to those few: A 21-unit luxury building on a historic site in Wayzata.
The project recently received final municipal approval and developer Jeff Schoenwetter hopes to break ground early this year to satisfy a deepening dearth of for-sale condominiums in the metro.
The three-story building will be called Meyer Place at Ferndale, named for the Meyer Bros. Dairy it is replacing at 105 E. Lake St. on the northern shore of Lake Minnetonka.
Schoenwetter has been working for several years with members of the Meyer family, who will retain an ownership role in the project via a 99-year land lease that will transfer to the individual homeowners once the closings happen. Such land leases aren’t common in the Twin Cities market, but they are seen often in bigger cities.
The flat-roofed brick, stone and wood structure was designed by Whitten and Associates and inspired by the Prairie School architecture of Frank Lloyd Wright, according to Tom Bakritges, director of land development for Schoenwetter’s development company, Homestead Partners, based in Hopkins.
“Whitten designed something with some historical perspective,” said Bakritges. “It doesn’t look like any other condo building.”
The project is in a residential area of the city and Schoenwetter expects many of the buyers to be people who already live in the Wayzata area and want to downsize. Schoenwetter has already accepted 11 reservations.
The units will be sold with up to three heated parking spaces each, and the building will include a fireside room, club room, party room and fitness area. Construction is expected to be completed by the end of the year.
The units will be priced about $500 per square foot and they’ll range from 1,800 square feet to nearly 3,000 square feet. Across the metro, new condominiums sold for an average $328 per square foot, according to November sales data from the Minneapolis Area Association of Realtors. That’s 4.1 percent more than last year and twice the square-foot price of all properties that sold during that time.
At the opposite end of town, in Wayzata’s downtown area, developers are working on another phase of the Promenade of Wayzata, a sprawling mixed-use project that includes retail and senior housing. The Regatta condominium component of that project is already sold out and the developer is working on a second phase called the Landing, a 31-unit building that’s nearly 85 percent presold.
Demand is strong
Those projects are among only a handful of condo buildings in the pipeline in the Twin Cities metro. Maxfield Research, a local real estate consulting firm, says that just shy of 760 condo units are planned, under construction or recently completed.
That includes a proposed 42-story condo tower across the Mississippi River from downtown Minneapolis. The largest is in Minneapolis where Jim Stanton of Shamrock Development is building the Legacy, a 400-unit building in the Mill District neighborhood along the Mississippi River.
Stanton recently completed Portland Tower, a 17-story high-rise, on the east side of downtown. About half of the 112 units in that building are sold.
Condo development in the Twin Cities has been stunted by what developers say are state laws that create too much liability for too long. Minnesota is known for having some of the most stringent construction defect laws in the nation. Real estate agents blame those laws for what appears to be a shortage of condo listings.
During November, there were just 635 condominiums on the market in the 13-county metro, a nearly 23 percent decline from last year, according to the Minneapolis Area Association of Realtors. At the current sales pace, those units would last just 1.9 months. That’s down from last year and far below the metrowide average for all properties.
“I would say that depth of demand is strong right now for condos in the downtown,” said Mary Bujold, president of Maxfield Research. “There are not enough units available to meet the demand.”