Minneapolis real estate is currently seeing shallow supply levels, with the exception of office space. Retail and industrial asset demand is especially high, which has been the case throughout 2021. Moreover, property values across all asset types have soared in the last few months in no small part due to inflation at a national level.
There has been a notable uptick in suburban community populations in the Twin Cities providing a plethora of opportunities for developers.
In Minneapolis, developers and owners are pressing against the city council’s proposal to limit rent escalation schedules to 3% annually. Developers are concerned about taking on additional multifamily developments and have halted some projects. With inflation levels reaching an annual 6.8% in the 12 months ending November 2021, multifamily owners and operators understand that they would be losing money once they discount cash flows and account for inflation.
Hines is acting as the developer on a mixed use project dubbed the North Loop Green 3. The project costs over $200M and includes 350,000 square feet of creative office space, 350 luxury market rate and 100 short-term rental residences, 17,000 square feet of food and beverage offerings, and a one-acre public green space. This transit-oriented project is strategically located in proximity to downtown Minneapolis.
Ryan Companies and Arcadia LLC are working together on the Eleven Condo Tower, a 41-story luxury condo tower. When completed, it will be the largest residential building in Minneapolis, with units starting at $900,000.