New Construction at Fastest Rate Since 2007

Real Estate Week in Review

Buyers should continue to see great rates in the months ahead, as the Federal Reserve has indicated they are unlikely to raise interest rates in June (Fed minutes indicate June rate hike unlikely, CBS News).  At April’s meeting, policy makers were divided on if the winter’s weakness would continue, but most agreed that June would be too soon for the hike. The average US rate on a 30-year mortgage went down to 3.84%, while the 15-year loan rate went to 3.05 (Star Tribune Your Money).  Mortgage rates remain at historic lows: this time last year, the 30-year rate was at 4.14% while the 15-year rate was at 3.25%.

US existing home sales were down 3.3% in April, reflecting a shortage of listings and higher prices (Star Tribune). The number of listings was down .9% in April from a year prior. Demonstrating the advantage for sellers, the median home sold in 39 days (with this area seeing many lower market times, often in a matter of days).

home builder clipartHowever, new construction has surged to its fastest rate since 2007. CBS MoneyWatch reports: “Residential homebuilding jumped in April to the fastest pace in nearly seven-and-a-half years, signaling the economy is pulling out from its weather-related struggles in recent months. The Commerce Department said Tuesday that housing starts last month increased 20.2 percent to a seasonally adjusted annual rate of 1.14 million homes. That pace ranks as the fastest clip since November 2007.”

Around the Cities

CHS Field in Lowertown held their grand opening this week. The new home of the Saint Paul Saints has many features benefitting the community: for instance, it’s green, serves local food and beverages, and was designed and built by local companies (9 Things to Know about CHS Field, Minneapolis St Paul Business Journal).

Lakefront Hotels are making a comeback at Lake Minnetonka, with projects proposed in Wayzata and Excelsior. Says Steve Bohl, the developer of Wayzata’s hotel: “Lake Minnetonka was all about hotels. Now we’re going to be the first back,” said Steve Bohl, the developer of Wayzata’s hotel. “It just brings a legacy back in the market.” The hotel is estimated to draw 22,000 to 25,000 visitors each year, already with inquiries for events including weddings and meetings.

Also in Tourism news, Treasure Island Resort and Casino is planning a $19 million expansion. The 40,000 square foot project will include swimming pools, water slides and outdoor patios.

Excelsior Marketplace is nearing completion, anchored by a Kowalski’s grocery. Grocery-anchored marketplaces are a trend right now in the Twin Cities. “The grocery business is changing so much,” Ryan said. “To have a smaller, more neighborhood type of offering with high-quality produce and meat — yet in a smaller footprint — is very inviting. The organic play is an important part of this industry, too. The Kowalski organization is a leader in that field. The city is fortunate to have them as part of the community. We think it is going to be a spectacular fit.” See more here.

Indeed Brewing, the popular Northwest Minneapolis craft brewery is also planning an expansion, to include another taproom and a gift shop. “The demand for taprooms has grown like crazy and ours has only gotten busier,” co-founder Tom Whisenand said.

This Memorial Day

Miller Grossman would like to take a moment to salute our service men and women who have made the ultimate sacrifice this Memorial Day. Our thoughts are with their families and loved ones. Thank you.

Image from 123rf.com

Another Economic Boon to the Saint Paul Area

Real Estate Week in Review

University of Minnesota

Fox9 reported this week on the University of Minnesota housing improvement plan (“8 objectives in U of M housing improvement plan,” May 3). The plan is to make on-campus living more attractive to students, and their budgets. Improvements include:

“- Renovate or replace Pioneer Hall
– Guarantee campus housing for all first-year students meeting the application deadline
– Modernize “Superblock” dining facilities
– Increase the number of first-year students living in residence halls another year
– Increase demand on St. Paul campus housing (Bailey Hall)
– Ensure transfer students “receive housing support”
– Develop second-year experience programs with non-U of M housing partners
– $3 million in safety, efficiency and comfort improvements for Greek housing”.

At this time, “it’s unclear exactly how much all the improvements will cost, and who is fronting it.”

In other University news, Sanford-Brown announced on Wednesday their campuses in Twin Cities area will close after current students graduate. 14 sites will close, including locations in Mendota Heights and Brooklyn Center. The decision is said to focus their resources on universities in Colorado, Atlanta and Houston.

Stadium News

The Saint Paul Saints are ready for opening day at CHS field, reports REJournals.com, offering a virtual tour. The Saints will take the field in their new Lowertown location for the first time on May 21. It is set to be “another economic boon to the Saint Paul area.”

The Star Tribune reported this week the Ryan Companies proposal for a new Radisson Red hotel near the Vikings stadium. “The developer has submitted a proposal to the City of Minneapolis for a five-story, 164-room Radisson Red hotel on one of the two liner parcels behind the new Wells Fargo towers that Ryan is currently building.”

Radisson Red

Residential Real Estate

The Star Tribune reported last week that 25% of US renters are using 50% of their income for housing (“1 in 4 US renters must use half their pay for housing costs,” May 1). With interest rates low and the rental rates high, many buyers are finding it is more affordable to purchase a home than rent one, along with the numerous benefits of homeownership. Contact Miller Grossman (651-434-7887 or MillerGrossman@CBBurnet.com) to discuss your options and begin your search.

In Other News

Plans for the 159 unit mixed use development at 100 Hennepin Ave in Minneapolis were unveiled this week. The six story building will include a coffee shop, possibly a restaurant, and 11 walk-up townhomes along 1st Avenue North.

100 Hennepin

Local nightlife favorite Cowboy Jack’s is set to take over part of the now defunct Epic Nightclub (which closed in 2013 after a fatal shooting), where the new Shout House occupies the first floor. It is set to include a bar, booths and tables, and a 2nd floor patio. There is no set open date at this time. Cowboy Jack’s currently operates nine locations in three states, most in the Twin Cities.

The Tea Garden in Uptown has a new owner, new name and new look, set to be a more elegant experience catered to a wider audience. The selection of teas will jump from 50 to over 100. Says Steve Day, owner of Plymouth-based general contractor SullivanDay Construction, the focal point of Sencha is a round, 11-foot tea bar, topped off by a rotating tea rack overhead. The overall effect is “wicked cool.”

Saint Paul in the Spotlight

Week in Review

Twin Cities Business and Minnpost reported this week on “Saint Paul’s Time to Shine,” a review of new development and real estate projects putting the capital city in the spotlight. Some of the projects include a new stadium for the Saint Paul Saints in Lowertown, the Light Rail Green Line, the redevelopment of the Seven Corners hardware store site Gateway sites, along with the redevelopment of the iconic post office site and a possible new practice home for the Stanley Cup-bound Minnesota Wild. (Go Wild!)

“We’ve always thought downtown St. Paul is an excellent spot to invest,” says [Rich] Pakonen [of PAK Properties], who says that the appealing vintage buildings are drawing people from outside of St. Paul as tenants.

He says that he’s surprised that more developers are not drawn to the St. Paul market. “Half of the Twin Cities population lives east of the river. It’s surprising how there’s less competition here,” says Pakonen.

Also in the news, Twin Cities.Com Pioneer Press and Environmental Protection Online are reporting the latest plan for the Ford Plant site in Highland Park to become the state’s largest “net-zero” energy redevelopment, by utilizing solar energy as well as thermal energy recaptured from the Army’s groundwater treatment plant already underway to heat and cool homes.

“The plan is tentative and hinges on factors such as securing the additional acreage needed for the solar farm, cleaning that land and finding private partners willing to finance the green projects.

“I would say the whole of the plan is ambitious, but, incrementally, we think things are very doable,” [Greg] Mack [the county’s project manager for the site’s Energy Integration Resiliency Framework] said. “None of this is new technology; it’s all proven. It’s finding partners to implement it (with us) in the time frame we have available.”

Yesterday, Twin Cities Business Journal reported Sherman Associates is also moving forward with the second phase of its development of the west side flats, a beautiful complex in downtown Saint Paul overlooking the Mississippi river, and featuring retailers and an undisclosed restaurant. Also moving forward, the plan by Timberland Partners to renovate Sibley Square into 134 market-rate apartment units.

“We like the demographics of Lowertown. We also did our market research. I think that’s a good, stable market. The employment that is in St. Paul has always been very stable,” says Ryan Sailer, vice president of development with Timberland Partners. “It was a market we felt comfortable with” (Minnpost).

West Side Flats

West Metro Living

The west metro is looking forward to two new grocery redevelopment projects. Lunds and Byerly’s (now under the new combined name) is remodeling the 970 Prairie Center Drive store, while Oppidan Investment Co. plans a complete tear-down and rebuild of the Bally Total Fitness in Saint Louis Park site into a six-story, 177 unit apartment complex and newcomer grocery store, Fresh Thyme Farmer’s Market. After some pushback from local residents, the project may be scaled back to 5 stories, but is moving forward.

Fresh Thyme Farmer's Market

South Side Shines

Apple Valley remains a great place to buy or sell, with home prices lingering above the metro area as a whole, reports the Minneapolis Area association of Realtors. The median sales price rose 7.5 percent from this month last year. Along with Saint Paul and the greater metro area, Miller Grossman specializes in Apple Valley and south metro real estate, with specialized and experienced knowledge in the area.

apple valley may median sales price