Jan 31, 2023 - Real Estate

Minneapolis office building is likely to become apartments

An old brick office building

This old office building at 312 Third St. S. is likely to be converted into apartments. Photo: Nick Halter/Axios

A local developer may turn a 117-year-old downtown Minneapolis office building into apartments.

Zoom in: Two weeks ago, developer Mohamed Elkhateeb bought a six-story office building at 312 S. Third St. for $2.7 million.

  • He told Axios he is likely going to turn the six-story building into 57 to 67 apartments, and he figures he can do it at a cost that is 20% to 40% cheaper than constructing a new building.

Zoom out: Finding buildings in Minneapolis to convert to apartments is tricky. Many of them have large floors, leaving space in the middle that is too far from a window.

  • Most of the pre-1950s office buildings with small floors have already been converted to hotels or apartments, including The Foshay Tower, Rand Tower, and the Soo Line Building.
  • But not all of them.

Of note: There's a law firm leasing two floors in the building now, and Elkhateeb said it's possible the firm could stay while the rest of the building is converted.

Meanwhile: A few other conversions are in the works, including part of the downtown Minneapolis Northstar Center, the former Strutwear Knitting Building next to U.S. Bank Stadium and St. Paul's Cray Plaza.

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