Developer Sees Promise in Downtown Minneapolis Condo Market

Developer Jim Stanton on his renewed interest in the Downtown Minneapolis condo market, from Finance and Commerce:

Stanton estimated that there are about 300 new condos in various projects currently for sale across downtown Minneapolis — not counting units up for resale — a sign to him that it’s about time to build.

“We are out of bread and butter stuff, by that I mean stuff up to $375,000,” Stanton said of condo units remaining for sale in his other projects...

We've heard similar bottom calling sentiments from most major players in the downtown Minneapolis condo market - for sale inventory under $300-400K is dwindling, very few new projects are coming to market, etc. etc.

And, believe it or not, based on the reports we've recently reviewed, appraisers are seeing a good bit of price stability - mostly in the North Loop and Mill District - in the sub $300k price band.

There's more:

“We got rid of all the DITs [developers in training]. If they didn’t wake up themselves, the bankers told them that they were out of business. So I’m kind of optimistic,” Stanton said.

We can't disagree with his optimism entirely.  However, like the developers who've been forced out by tighter lending standards, the "bread-and-butter" buyer for the sub $375K stuff - typically long on credit, good income, but short on cash - may find a very different financing environment by the time these units make it to market.

That's because condo financing, already signifcantly tighter than in the height of the boom, is setting up to be the next shoe to drop, and we expect lending standards for condos to be get much tougher in 2009. 

Tighter standards, should they materialize, will undercut demand for any new projects.  We could be wrong on this, but consider yourselves warned.

09/09/08 at 01:16 PM Permalink | Comments (1) | TrackBack (0)
Filed Under: Condos & New Developments, Downtown, Minneapolis

Whitney Condo Unit Owned by Local Couple Featured in NYT

Image via Michele Litvin for the New York Times

It's been a while since we've checked in on the Whitney Landmark Residences - The standard Mill, then hotel, then condo project in the heart of downtown Minneapolis' mill district - one of our personal favorites as far as downtown condos go.

Anyway, the NYT has a story on one couple's purchase and subsequent build-out of a unit, once the turbine room at the 19th century Standard Mill, at the Whitney:

IN the fall of 2007, Will Hopkins and Mary K. Baumann made what many New Yorkers would consider a puzzling real estate decision. Maybe a crazy one. Having sold their Chelsea office, the veteran graphic designers traded a 2,000-square-foot apartment in one of the grandest buildings on the Upper West Side, with 13-foot ceilings and a 100-foot-long courtyard view, for a pair of unfinished basement condominiums. Oh yes, and the stabilized rent on the apartment was $2,000 a month. And the condominiums are in Minneapolis.

Check it out - the piece details some of the unique touches they put into the project, with a cool slide show of the finished unit. 

09/04/08 at 02:17 PM Permalink | Comments (0) | TrackBack (0)
Filed Under: Downtown

North Loop Condo Pipeline Drying Up

Finance and Commerce reports on the status of Downtown Minneapolis' North Loop Condo Pipeline (Pipeline = industry-speak for planned and in-process projects):

The new, under-construction Twins stadium has been touted as a catalyst for new development. But so far, new development has been slow to take off in North Loop.

The previous wave of residential condo development has largely ground to a halt. And amid the bumpy economy, there isn’t much fresh development in the current pipeline around the ballpark, slated to open in the spring of 2010.

From the perspective of a developer, this not only bad news, but a sign of the times. It is simply too costly, too risky, or both, to launch any new projects right now.

And after the onset of the credit crunch last summer, just as for individual homeowners, financing new projects got tough:

right after late August [or] Labor Day, it was literally like a switch had been flipped and that market evaporated,” Minn said.

lenders making loans backed by commercial mortgage-backed securities (CMBS) loans drove much of commercial real estate financing in recent years, until the credit crunch hit last fall.

For the individual homeowners - mostly condo dwellers - in North Loop, this can be taken as a positive sign.  Though there is still some inventory overhang from completed projects with unsold units, and financing a condo has gotten markedly tougher, new supply will soon be limited to re-sales only, and should provide some pricing support and enhance their prospects for appreciation, even if a few years away.

05/28/08 at 10:07 AM Permalink | Comments (4) | TrackBack (0)
Filed Under: Condos & New Developments, Downtown, Minneapolis

Reports from the Field: Putting the 'Sex' in Sexton

We compiled the image above from this Sexton Property Listing, based on an anonymous tip:

So after reading the Strib article [on the Sexton] I went to the MLS to look at the history.

Turns out there is an active listing from one of the original owners that was foreclosed...I noticed in the details mention of “adult entertainment room”...indeed, the unit includes a lower level decked out in mirrors, couches and poles – a real business opportunity! Yikes!

Word to the wise: If you are going to install a sex room in your condo, be aware that a simple search of property tax records, or in this case a record of Sherrif's Foreclosures makes it easy to establish your identity as a known pervert. Not that we looked it up or anything.

And also:  This property is currently listed for $109,900.00 (reduced from $159,900.) Last recorded sales price?  $620,000.00.

That is a horse-choking $510,000.00+ loss for homecomings financial.

Bounty: Any agent who can come up with pictures of the AER (a feature that just begs for its own acronym) we'll run your next 3 open houses as posts, or get you some other similar publicity, right here on Behind The Mortgage.

04/29/08 at 03:12 PM Permalink | Comments (3) | TrackBack (0)
Filed Under: Condos & New Developments, Downtown, Foreclosures, Sexton, Twin Cities

The Mess at Sexton: More Details

Front and center in the business section today is a massive version of the photo above, via Star Tribune.

Accompanied by an article with more detail on the ongoing saga down at the Sexton, where only 36 of 123 units are occupied, and the entire project is a messy tapestry of fraud, foreclosure, and lawsuits.

"[The Sexton] doesn't come up in conversations very often, but when it does, the comment usually is something like 'That place is really a mess,'" Melchior said.

We'd expect to see some indictments for some of the principal actors soon, and one wonders whether the Sexton Building will be given similar treatment as the TJ Waconia, and is being set up for city administration/ownership/receivorship.
Sexton Building: That Place is a Mess [Strib]

04/28/08 at 03:50 PM Permalink | Comments (2) | TrackBack (0)
Filed Under: Condos & New Developments, Downtown, Foreclosures, Fraud, Minneapolis

The Nicollet Update, Reader Mail: If You Build it, Will They Come?

hat tip to Ben Ganje @ Your Urban Life for the image. Click for larger. Inspired by this Image, if you don't get the reference.

A reader, who has reserved a unit at the Nicollet, inquires:

"I really enjoy your website.  Could you please do an update or send me an e-mail personally regarding the current status of The Nicollet.

Do people generally get their reservation/deposit money back if a project and purchase agreement is cancelled by the developer, or should I be getting ready to contact a lawyer for assistance?  I would certainly hold my purchase agreement if I had confidence that something (whether residential or mixed use) was going to get built there, but my doubts are increasing.  What would be the best way to proceed at this point in time, in your opinion, hold tight or attempt to withdraw?"

It will be 45 stories high, with underground parking for 300 cars, 22,000 sf of retail space, 16,500 sf of banquet space, a 20,000 sf health club and spa, 437,000 sf of office space, a 260 room hotel and 177,000 sf of condos....

Right now the project and the preliminary concept design work product are in the hands of the real estate department and their brokers and agents to market the idea to tenants for the office space, a franchise for the hotel and buyers for the condomuniums.

10/22/07 at 12:35 PM Permalink | Comments (1) | TrackBack (0)
Filed Under: Condos & New Developments, Downtown, Industry News, Minneapolis, Reader Mail, Twin Cities

Rumor Mill: More Trouble at Sexton?

As if there weren't enough trouble at the Sexton Condo's, what with the developers suing one another and all.

We received a tip yesterday from a well placed source, that a drug bust went down, several units (four?) were raided, and that this bust involved the manufacture of illegal goodies.  We haven't seen anything official yet, so we'll file this in the mostly unsubstantiated rumor file for now.

The kicker?  Our tipster says that while the raid was in process, the Hennepin County Sherrif's office showed up to serve foreclosure notice on one of the units.  Talk about a bad day.

Know anything?  Drop us a tip right here...

07/27/07 at 09:08 AM Permalink | Comments (0) | TrackBack (0)
Filed Under: Blind Item, Breaking News, Condos & New Developments, Downtown, Minneapolis

Sexton Condos: Circling the Drain, Facing Possible Foreclosure

The Downtown Journal's Michelle Bruch has penned a rather amazing article on the ongoing saga at the Sexton Condo's - a downtown Minneapolis project that has basically degenerated into a tossed salad of mismanagement, suits, countersuits, alleged fraud, etc. etc. etc.

We've heard rumblings of major issues down at the Sexton for a while, and Michelle has dug up all sorts of Juicy dirt on the goings on.  Some highlights:

• The Partners in the development, JJT Construction, Heather Enterprises II, and Medved LP, are all suing each other for among other things, "negligence, fraud, breach of contract, libel, and slander."
• No more units are being closed in the building pending this litigation.
• Tenants who payed for garage spaces are now facing the possibility that the garages, part of phase II, will never be built.
• Units were allegedly being sold at huge markups, with sales commissions to realtors in excess of $100,000.00 per unit.
• Fraudulent purchase agreements were allegedly created to secure construction financing.
• More than 7 Million dollars in cost overruns and mismanaged funds.

And much, much more in this edition of "When Condo Projects go Bad" over at the Downtown Journal.
Battle at the Sexton [Downtown Journal]

07/10/07 at 10:41 AM Permalink | Comments (6) | TrackBack (0)
Filed Under: Condos & New Developments, Downtown, Minneapolis

Downtown Journal Picks Up 607 Washington Lofts Story

Front and center over at the Downtown Journal (which, by the way, has a GREAT new look/website) is a story we first reported on here: The apparent debacle at 607 Washington Lofts:

The cause of the foreclosure spike at 607 Washington is something of a mystery, but real estate documents indicate that three condo owners are behind nine of the foreclosures, with more than one foreclosure in some condos due to multiple creditors. Several units in the building remained on the market for two years and sold in the summer of 2005 at hundreds of thousands of dollars more than the original list price, a trend that seemed odd

Also in the article, a nice little hat tip from the author, Michelle Bruch:

Speculation about the building’s foreclosures first surfaced on the blog Behind the Mortgage in February, in a post written by mortgage banker Alex Stenback with data analysis by Downtown real estate agent Michael Roess.

A Flurry of Foreclosures [downtownJournal.com]

05/14/07 at 02:24 PM Permalink | Comments (5) | TrackBack (0)
Filed Under: Condos & New Developments, Downtown, Industry News, Minneapolis, Press, Twin Cities

Downtown: Revue Condo Project Cancelled

So it goes:

The project, known as The Revue, was to have included 107 condos on a site at the corner of Washington and Chicago avenues South. The site wraps around a parking ramp constructed a year ago to serve the Guthrie. A message at the sales center office said, "This development has closed," and directed callers to the company's other pending condo projects.

Curtain Closes on Revue Condos [TCBizjournal]

05/09/07 at 07:56 AM Permalink | Comments (0) | TrackBack (0)
Filed Under: Condos & New Developments, Downtown, Minneapolis, Twin Cities