Greco Development began construction this fall on what the company says is the biggest housing project in Minneapolis since 2007.
The 216-unit apartment complex along the Midtown Greenway and other projects are generating optimism in Uptown following a few years of downturn that had some concerned about the future vibrancy of the area.
“I think it’s really showing that there’s continued interest in Uptown, from both the market perspective but also an investor perspective,” said Thatcher Imboden, president of the Uptown Association.
Greco’s newest development is called Flux Apartments. As its name alludes, it’s being marketed toward people who are starting new careers or changing professions and are uncertain about where they will be in a few years. The development is on the north side of Greenway and along Fremont Avenue.
The apartments will be upscale and rents range from $1,000 for an alcove to $3,000 for a 2-bedroom penthouse. The one- and two-bedroom units average rent is $1,400 and $2,000, respectively.
“There is pent up demand for good, quality rental, and I think the options are limited,” said Brent Rogers, Greco’s vice president of development. “I think historically, Uptown has been a very strong rental market, but the options are relatively limited.”
Apartment vacancy in the Twin Cities hit a two-year low in the third quarter of 2010, with a 4.2 percent vacancy rate, according to Minneapolis-based GVA Marquette Advisors. The rate had peaked at 7.3 percent in 2009. In Minneapolis, however, the rate is only 3 percent.
Greco isn’t the only developer who broke ground in the fall. CPM Development is constructing a 57-unit luxury apartment complex with space for retail and office on Lake Street and Knox Avenue near Lake Calhoun. The company is targeting a fall 2011 opening.
Brighton Development began construction in November on 63 units of affordable housing at 28th Street and Lyndale Avenue, on the Salem Lutheran Church property.
Also, The Ackerberg Group is close to finalizing financing on the first phase of Mozaic, a mixed-use project on the south side of the Greenway, across from the new Flux development. The first phase calls for the construction of a seven-level building, with six floors used for parking and the first floor for commercial space.
Imboden, who also works for The Ackerberg Group, said the Flux construction is a positive not only for Mozaic, but all of Uptown.
“A lot of tenants as well as lenders want to see that the area is growing and that in the long run there’s going to be more potential customers,” Imboden said. “Certainly, in the long run, this is helping us underwrite our project.”
Rogers said the Flux project is the biggest housing development in Minneapolis since it developed it’s 242-unit apartment complex, called Blue, in Lyn-Lake in 2007.
Rogers said Flux will incorporate many of the same amenities it did with Blue.
Flux will be a U-shaped development opening up to the Greenway. Two buildings will be six levels high and the building to the north will be four-levels tall. In the middle of the development will be a courtyard, swimming pool, grilling area, private bar and grassy area. There will also be a small dog park on the property.
While Blue and Flux will be similar, Rogers said Flux will have its own identity.
“It’s going to feel much more like a resort in the middle of Uptown that anything else that’s here,” Rogers said.
Underneath the project will be a 243-stall parking garage. But as Rogers pointed out, residents may not have to do much driving. The apartments are just a few steps from the Greenway as well as the Uptown Transit Station.
“The greenest features of the building really is the location, because it allows people to live in a lower impact environment, with the access to transit and all the services,” he said. “People don’t have to get into their cars and drive around.”
According to Greco, the project will employ 315 people during the 13-month construction before Flux opens in January 2012. The total cost of the project is $38 million and it will be financed by NorthMarq Capital, AFL-CIO Building Investment Trust and PNC Realty Investors.
Rogers said the Blue apartments are 96 percent leased, which tells Greco that despite a poor economy, the demand for upscale apartments in Uptown is strong.
“We’ve been able to lease that project up and basically beat our pro forma and right in the midst of the economic crisis,” he said. “And I think that just speaks to how well received a high-quality, well-done project can be in this neighborhood.”