Inside a Minneapolis office building's conversion to apartments
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Minneapolis developer Sherman Associates took a 13-story office building and turned it into 216 apartments. Photo: Nick Halter/Axios
The $97 million transformation of the downtown Minneapolis Northstar East office building into apartments is nearly complete.
Why it matters: Many view projects like this as the cure for struggling downtowns, but the story of the new Groove Lofts also reveals how financially and logistically difficult they can be.
What they did: Minneapolis developer Sherman Associates took a 13-story office building — parts of which are over 100 years old — and turned it into 216 apartments, with 44 set aside as affordable for tenants making under half of the median wage.
- The remaining units are priced about a third lower than the new buildings that have gone up downtown in recent years, company president Chris Sherman told Axios during a tour of the building.
The big picture: When fully leased, 500 to 600 people will be living in a historic building saved from the wrecking ball. And the company expects they will be eating, drinking and shopping downtown, helping make up for the loss of office workers.
Yes, but: Pulling off the project required about $35 million in public subsidies from federal, state and city resources.
- Put in context, $35 million would pay the total cost to construct 115 to 140 new apartments in a lower-height, timber-framed project, according to typical industry cost estimates.
What they're saying: Chris Sherman, a leading voice in support of government incentives for projects to repurpose old buildings, said new build "stick frame" lumber doesn't last as long as the concrete of existing downtown buildings.
- "With stick frame, we view that as generational housing. When we build concrete housing, or convert concrete buildings from office to housing, we're building for centuries."
What's inside: Sherman had to be clever in laying out the apartments, because Northstar was built originally for office use and has deep floors, with a middle section far from windows.
- Non-corner units are narrow and their bedrooms don't have windows. That's one reason Sherman's rents are lower than those in new buildings.
- The middle spaces of the building on several of the floors have been turned into amenities for tenants, including a co-working office, movie theater, video game lounge, karaoke rooms, golf simulator and storage.
What's ahead: Minneapolis leaders will be asking the Legislature for more tax credits to layer onto existing federal and state ones for projects like this.
- A bill to do so last session didn't pass.
