Four more ‘luxury’ complexes expected soon near campus

In all, new developments would add 1,200 beds to the University area.

Four more ‘luxury’ complexes expected soon near campus

Kaitlin Walker

Even as construction on several apartment complexes around the University of Minnesota campus wraps up, the boom in high-density housing has not ended.

Plans are in the works for four more complexes near the University, including a 120-unit apartment building on the corner of Fourth Street and Eighth Avenue Southeast.

Then thereâÄôs Limelight Apartments, Solhaus, 412 Lofts and FloCo Fusion Landmark Apartments, all currently leasing and scheduled to open by the end of August. Construction on Stadium Village Flats, which began in May, will be finished next summer.

All told, these nine developments will add more than 1,200 beds to the housing market near the University.

Jim LaValle, vice president of development for Doran Companies, said the company is meeting a demand that hasnâÄôt been met in years with 412 Lofts, which it started a month after finishing Sydney Hall.

In the coming months, the company will break ground on its development in Stadium Village called Oak Street Flats, which will open in August 2012.

âÄúThere was a number of years where there were virtually no buildings being built around the University,âÄù LaValle said. âÄúIn our opinion, there was a real unmet need for new, safe and secure housing surrounding the University.âÄù

In addition to proximity to campus, students are looking for newer housing with updated amenities and increased privacy, said Matt Mullins, the vice president of business development for Maxfield Research Inc. Students are finding that through what he refers to as âÄúluxuryâÄù apartments.

âÄúThe majority of housing stock has traditionally been older housing stock, without todayâÄôs modern amenities,âÄù Mullins said. âÄúTodayâÄôs students are demanding a certainly different product type than what has traditionally been offered for student housing.âÄù

However, proximity and luxury come at a cost âÄî Mullins said students should expect to pay an average of $850 a month for a spot at the new complexes.

Studio and one-bedroom units in many of the apartment complexes opening in the next two years start at $1,000 or more a month.

But the price isnâÄôt scaring people away, Mullins said. If not filled, most of the developments surrounding the University are at 95 percent occupancy by the time they open, he said.

âÄúAnd thatâÄôs substantial for a new rental development,âÄù Mullins said. âÄúIt just blows me away how well theyâÄôre performing.âÄù

About 88 percent of the FloCo Fusion apartments have been leased for next year, while 85 percent of the units at DoranâÄôs 412 Lofts are set to be filled, according to the buildingsâÄô respective leasing officials.

Mullins said that for now, these types of developments will continue to succeed, but they may eventually run into problems.

âÄúI donâÄôt know how much more the neighborhood can sustain,âÄù Mullins said. âÄúIn the short term, I think weâÄôre OK. But sooner or later, someone is going to suffer if they keep going at that pace.âÄù

Tim Harmsen, who owns Dinkytown Rentals with his wife, said he isnâÄôt worried about losing business to the new complexes. So far, the surge in luxury apartments hasnâÄôt affected them.

Of the roughly 700 bedrooms he rents, only a dozen are open for September leases, he said.

âÄúTheyâÄôre just replacing the aging and obsolete housing stock,âÄù Harmsen said.

Many of the rental houses available around Dinkytown, some of which were built more than 120 years ago, need to be updated or replaced Harmsen said.

âÄúTheyâÄôve gotten to the point where theyâÄôre just worn out,âÄù he said. âÄúThe students âĦ deserve a safe, secure building to live in.âÄù

Harmsen said while prices on the new apartments are high, they will come down to stay competitive as more buildings are built, and others updated.

âÄúThe people who are going to have trouble are the people who have not maintained their properties,âÄù he said.

Mullins said he doesnâÄôt think the apartments will cause too much trouble for companies like HarmsenâÄôs.

âÄúYouâÄôre always going to have the lower rent houses,âÄù Mullins said. âÄúNot everyone can afford that $850 rent.âÄù

Harmsen said the main focus for housing should be quality, and that heâÄôs noticed students are making it a priority.

âÄúIt used to be a situation that location would trump quality,âÄù Harmsen said. âÄúBut now, because the University has done such a good job with transportation, quality is trumping location.âÄù