Apartment Construction Boom (2011-??)

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MNdible
is great.
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Re: Apartment Boom

Postby MNdible » December 5th, 2013, 3:23 pm

From the article:
If the market busts, Harmsen said the properties closest to campus will survive. Customers should be rooting for this, Harmsen said, because only the landlords will suffer.

“Competition helps everybody,” he said. “If you explode a market, then the prices will go down.”
This bit should be in 36 point bold font. Amazing how few people get this.

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FISHMANPET
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Re: Apartment Boom

Postby FISHMANPET » December 5th, 2013, 3:55 pm

Yeah, for the love of god please overbuild housing in Dinkytown. Will make it cheaper for everyone.

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Nick
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Re: Apartment Boom

Postby Nick » December 10th, 2013, 6:25 pm

Anecdata: There appear to be about ten vacancies in my building, which has ~220 units. Not particularly significant by itself (anecdata!) but I've checked in with the office every couple months since moving in last fall to try to get a skyline-facing unit, and it's always been just a couple vacancies that usually get snatched up right after the first of each month. I think my building is pretty uncommon in that it's sort of in between the $600/month soiled carpet one bedrooms and $1800/month indoor heated dogrun one bedrooms. My $900/month rent for a one bedroom didn't go up this summer when I extended the lease another year, which surprised me. I literally ran down the street in May 2012 to grab my checkbook to put a deposit down on this apartment because they had three August 1st openings when I emailed them the day before, two were taken the day I toured, and someone was touring right after me.

I know at least one person from my building who moved over to Vue when it opened, I wonder if things are actually starting to shift?

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Nick
Capella Tower
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Re: Apartment Boom

Postby Nick » December 20th, 2013, 7:46 pm

Follow up: I hear Eitel down the street (and in a different price range) has lots of vacancies, too.

ECtransplant
US Bank Plaza
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Re: Apartment Boom

Postby ECtransplant » December 20th, 2013, 8:50 pm

I know a couple people who moved out of Eitel. They were very displeased with Village Green's management

twincitizen
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Re: Apartment Boom

Postby twincitizen » December 27th, 2013, 8:38 am


twincitizen
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Re: Apartment Boom

Postby twincitizen » January 8th, 2014, 10:14 am

The Twin Cities was the 7th-tightest rental market in the nation last year
The Twin Cities was among the tightest rental markets in the nation last month, despite the addition of thousands of new apartments. The average vacancy rate in the Twin Cities by the end of the year was 2.8 percent with the average rent rising 0.9 percent to $1,017

TheUrbanGopher
Nicollet Mall
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Re: Apartment Boom

Postby TheUrbanGopher » January 8th, 2014, 5:04 pm

Minneapolis has record-breaking year in construction projects: http://www.minneapolismn.gov/news/WCMS1P-118900
The City of Minneapolis set a new record for construction building permits in 2013. At year end, the total number of building permits issued in 2013 was 12,100 with the valuation of $1.211 billion.

talindsay
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Re: Apartment Boom

Postby talindsay » January 8th, 2014, 10:34 pm

12k permits valued at $1.2B puts the mean valuation at $100k, and the median would be expected to be a good deal lower than that. Does "building permits" include things like garage rebuilds? If so, the numbers make sense but if not, who is building structures for under $100k in Minneapolis?

Rich
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Re: Apartment Boom

Postby Rich » January 9th, 2014, 8:04 am

Permits are required for work as simple as replacing windows or adding a deck, right? Those kinds of projects might account for a lower mean valuation. Also, MPR says that only about 3,500 of the 12,100 permits were for housing units.

sad panda
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Re: Apartment Boom

Postby sad panda » January 9th, 2014, 8:59 am

Building permits in Minneapolis are required for pretty much anything that affects structure. A list of the most common needs are found at: http://www.ci.minneapolis.mn.us/mdr/bui ... /index.htm

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mattaudio
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Re: Apartment Boom

Postby mattaudio » January 9th, 2014, 9:10 am

Those aren't the permits described above. I'm not sure how exactly they break down, but there are different permit classifications. I'm not going to research more, because a sniff test proves this. 12,100 permits at an average of $100k each is too few and too high of an average price to account for every window, toilet, and stove replacement in the city.

Rich
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Re: Apartment Boom

Postby Rich » January 9th, 2014, 9:28 am

UrbanGopher’s link reveals a list of the 5 highest-value permits, which range from $36 million to $68 million. Couple major projects like those with all the permits for tiny remodel jobs and I’m guessing that brings the average permit to $100k.

twincitizen
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Re: Apartment Boom

Postby twincitizen » January 9th, 2014, 9:33 am

Either way, the numbers most relevant to this topic are these:

Number of residential housing units permitted in Minneapolis from 2008-2013

2008: 361 units
2009: 399 units
---
2010: 980 units
2011: 616 units
2012: 3,303 units
2013: 3,552 units

That's almost 8,500 units added since the 2010 Census was performed. Along with a tightening rental market for existing units, you have to figure Minneapolis is going to hit 400,000 residents later this year. (Sidebar: If the vacancy rate hypothetically declines one percent, how many units are absorbed? How many total official rental units are there in the city?)

2014 will almost assuredly see a drop in total units added, as many big projects are already under construction. However, if Marq4, Downtown East, 300 Washington, Dock Street phase 2, and the two potential West Calhoun projects all get going in 2014, I wouldn't be surprised to see around 3,000 units again.

mnmike
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Re: Apartment Boom

Postby mnmike » March 4th, 2014, 1:00 pm

And this is all I know, because I don't have a subscription. I guess we saw this coming...hopefully demand stays strong and it levels off at a still healthy rate...hopefully prices have topped off.

http://finance-commerce.com/2014/03/apa ... nneapolis/

Apartment vacancy rate doubles in downtown Minneapolis

By: Adam Voge March 4, 2014 9:47 am 0

Downtown vacancy rates ended 2013 at 4 percent compared with 1.9 percent the year before.

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FISHMANPET
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Re: Apartment Boom

Postby FISHMANPET » March 4th, 2014, 1:21 pm

I think this is still well below the "ideal" threshold, so the market is still very strong.

mnmike
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Re: Apartment Boom

Postby mnmike » March 4th, 2014, 1:31 pm

Yup...still good, but finally going up. Isn't around 4-5 what is considered "ideal"?

ECtransplant
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Re: Apartment Boom

Postby ECtransplant » March 4th, 2014, 1:55 pm

My understanding is 5% vacancy is considered "balanced"

twincitizen
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Re: Apartment Boom

Postby twincitizen » March 4th, 2014, 2:16 pm

Counting the seconds until that headline is shared out of context on SaveDinkytown or MRRDC (anti-development) Facebook pages...

The only thing that headline tells me is that a bunch of units came online in the 2nd half of 2013 and they haven't fully leased yet. 222 Hennepin, Soo Line, and a handful of North Loop projects come to mind. Mill & Main was said to be nearly fully leased. That said, unless Nic on 5th and LPM are heavily pre-leased (which sounds possible) the vacancy rate could be even higher at the end of 2014, unless the downtown job market is just going gangbusters.

gpete
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Re: Apartment Boom

Postby gpete » March 4th, 2014, 2:18 pm

Meanwhile, across the entire Metro, vacancy rates are still very low at 2.5% and rents are rising.

http://www.startribune.com/blogs/248385841.html


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