The North Loop is set to get its first new for-sale housing in nearly a decade.
Robb Miller and Curt Gunsbury received final approval this week to build 30 upscale condominiums in a new glass-and-concrete building in the heart of the Minneapolis Warehouse District between the central business district and the Mississippi River.
Final prices haven't been set but are expected to range from $900,000 to $3 million for units with private elevators, terraces and recessed balconies.
The duo plans to start marketing 602 First in early March, but they won't start construction until they get signed purchase agreements for half the units. They expect to break ground this spring.
"The market is really strong right now and there's a real dearth of choices for people," Gunsbury said. "We see this as really fulfilling a need in the market."
The eight-story building would replace two small commercial buildings. "I'm not sure there's any other place like it, it's right in the middle of everything," Gunsbury said. "It's like a quiet cul-de-sac, it literally backs up to the river."
The shape and scale of the building largely mimics the neighboring warehouses. But with walls of glass windows and recessed steel balconies, its contemporary design is a stark contrast to those brick and timber structures.
Agents say the North Loop is more than ready for more owner-occupied housing. Since the 2007 housing crash, downtown developers have been focused on building thousands of high-end rental apartments. There's growing concern, however, that too many apartments are hitting the market at the same, and some say there's pent-up demand among those who want to buy.
"I think the market is ripe for new construction," said B.J. LaVelle, a sales agent with the Downtown Resource Group in the North Loop.
Despite rising prices, in downtown and across the river, inventory has been steadily falling. There are now fewer than 150 properties on the market, including only 10 new units, compared with more than 600 at the peak of the market in late 2007, according to the Minneapolis Area Association of Realtors.
Developers have been reluctant to build for-sale housing because the gap between existing units and new construction was far too wide. Now, LaVelle said, "The price-per-square-foot numbers in the resale market are hitting the point where it starts to make more sense for developers."
Developers have worried about building condos because of the heightened risk of litigation that comes with building for-sale housing. During the last condo boom, several developers faced costly lawsuits from homeowner's associations after leaks and other problems were discovered years after completion of the building.
Gunsbury and Miller say that long-standing relationships with contractors and heightened attention to detail will help them avoid such problems.
"We are using multiple methods to mitigate risk," Miller said. "We go back to the basics: We build a quality product and we take care of our customers."
Miller, vice president at TE Miller Development, and Gunsbury, owner of Solhem Companies, have partnered on several large projects in the city, including the 7 West apartments where Grandma's Saloon once stood near the West Bank of the University of Minnesota campus. And they've developed many apartment buildings in the North Loop.
Hundreds of condominiums were built in the North Loop before the housing crash, but the 30 in 602 First will be the first since then. In the Mill District a mile downriver, Jim Stanton recently finished developing Stonebridge Lofts, a 164-unit project that was nearly sold out by the time the building was completed.
Bob Lux of Alatus has proposed a 40-story residential tower across the river from downtown Minneapolis, but hasn't said if they will be condos or apartments. And Stanton has proposed two additional condo buildings, including the Eclipse along Hennepin Avenue and a high-rise at the corner of 8th Street and Portland Avenue S. in Downtown East.