With a Wi-Fi lounge, up-to-date fitness center and apartment units with espresso-finished cabinets, The Woods of Burnsville might seem like one of the new rental complexes springing up around the Twin Cities.
In reality, it's a 1980s-era property undergoing an ambitious makeover — one of a growing number of obsolete rentals upgraded to satisfy the demand for trendy apartments that has spread to the suburbs.
With new complexes putting pressure on old ones to keep up, renters expecting more amenities, and investors getting in the game by buying older buildings and rehabbing them for half the cost of building new, the existing apartment stock is evolving. It's especially true in communities such as Burnsville, an older, largely built-out suburb that doesn't want to add more new rental housing.
Sales of apartment properties throughout the Twin Cities have climbed in the past couple of years, with about 50 sizable complexes changing hands since the start of 2012. Burnsville alone has seen four large apartment complexes sold in the past several months, including the 400-unit Woods of Burnsville.
Buying and renovating properties avoids hurdles newly built projects face in getting city approvals, not always easy in suburbs less comfortable than urban neighborhoods with high-density rental housing. Chanhassen's City Council last month OK'd plans for a 155-unit apartment building, but only after it was altered because of vigorous opposition from nearby residents.
"The neighbors are never enthusiastic about rental housing going in by them. I don't care if it's the Taj Mahal," said Mary Bujold, president of multifamily housing consultant Maxfield Research Inc.
"One of the things we look at in a community is the amount of new supply coming on line in the market," said Girish Gehani, chief operating officer of Chicago-based Trilogy Real Estate Group, which has bought and renovated apartment complexes in Minnetonka and Woodbury. The company recently acquired the 375-unit Parkway Apartments in Eden Prairie, where new market-rate apartments have been proposed but none built in 10 years.
Cities pleased
Communities typically welcome efforts to refresh their tired apartment complexes, recognizing there's increased demand for upscale rentals.