On Thursday, August 15, the new Rafter apartment building had its grand opening event. With fine hors-d’œuvres and libations, the parties gathered to celebrate the completion of another real estate development. It is said that the Rafter project is “named in honor of a group, or “rafter,” of wild turkeys known to call Northeast Minneapolis home.”
The project comes in at 26 stories with 6,548 square feet of commercial space fronting East Hennepin and 4th Street NE. Stacking up those 26 stories are 283 resident apartments, including two rent-free for resident artists. For all of the residents, there are around 282 parking stalls in an above-ground parking structure that is wrapped in a metal facade.
I began my evening on the 25th floor, where apartment 2503 — a penthouse — was open to see. The penthouse has two bedrooms, each with its own walk-in closets and connected bathrooms. One is larger than the other. The floor plan comes in at 1,836 square feet.
The price? The specific apartment 2503 in the “Wagner” model rents for $7,495, and the fine furniture is not included. You can add furniture to your rent through a relationship with CORT. The base rent of apartment 2503 works out to $4.08 per square foot. For comparison, the highest-priced apartment in Rentometer’s database for buildings within a half-mile radius of the Rafter was $2.86 per square foot. All apartments, down to the studios, include in-unit laundry, lighted bathroom mirrors and engineered wood floors.
From the balcony of the penthouse, I could see the rising height of Doran’s 25-story, $100 million, 368-apartment Expo tower that is under construction at the corner of University Avenue SE and 2nd Avenue SE. The tower is part of a three-block development at the old General Mills campus. Doran and partner CSM paid $15.8 million for the 8.7 acres in 2017. The three-block development is projected to add around 1,168 apartments, including 100 affordable apartments, to the Marcy-Holmes neighborhood.
The Party Space
Out on the patio was a selection of flatbreads with trendy ingredients. For the residents, there are large, natural gas grills and a mixture of high-tops, tables and lounge seating. Because the patio is built on a ramped parking garage, the northwest side of the space has higher and higher spaces with accessibility ramps connecting.
The interior is similar, with a bar, high-tops and a lounge with a media center. Throughout the common spaces and lobby are works of art by local and resident artists.
I did visit a one-bedroom “standard” apartment that rents for over $2,000. Funky vibes were playing as I chatted with two sales reps. The name of the playlist on the TV and speakers was “Hipster BBQ.”
I was told there were desserts in the “maker” space, which is a hybrid workshop and gathering space with spaces for tools and repairing bikes and even washing your smaller doggo. There also is a bar area with a refrigerator where I presume residents could throw parties. The place had a feel of plywood and concrete.
The feature that I loved — and I wish every building had — was an automated caffè espresso bar. The beans are supplied by Caribou, and the machine is manufactured by Keurig. No more pods!
I tested it out with some leftover ice and made myself an iced caffellatte at 5 in the evening. It was delicious, although if I were a resident, I would bring more ice.
One issue that vexes all multi-unit buildings is package delivery. My apartment building has 512 units, and we have Amazon, USPS, UPS and FedEx coming every day — several times a day in the case of Amazon. Managing package delivery takes staff time, and labor is expensive. That’s why developer The Excelsior Group installed a Luxer One automated package management system.
The wall unit has 81 spaces with different sizes optimized to what the expected package load will be based on Luxer’s data from other buildings. A delivery driver drops off the package and scans it into the system, which initiates a text to the resident. The resident enters a code to pick up the package from the locked space and “go on their merry way.” Excelsior can add more wall units or reconfigure spaces to fit what the residents need.
With only 81 spaces for 283 apartments, an overflow room is provided as well with cold storage for grocery delivery and meal kits.
The Affordability Question
So the question is: Will Rafter be part of a wave of gentrification on CenHen and Northeast, or will the new high-end units draw high-income renters from the rest of the market and not affect median rents?
The answer is: Maybe some of both. Clearly, CenHen is gentrifying as it becomes a more vibrant business district. Don’t be surprised by high rents at the Odin development under construction. That project, just a hop and skip away, is adding 333 apartments and 8,163 square feet of commercial space.
But with all these Instagram influencers moving in, they are vacating apartments or basements elsewhere.
The real question is from where to where. If each member of a family of four in Edina over the course of a decade each moved to Minneapolis, that added three apartment renters or maybe condo buyers in Minneapolis and took away one home buyer in the suburbs. If Greater Minnesota students come to college in the Twin Cities, get jobs in the Twin Cities and never return to their hometowns, that’s depressing prices in places like Mankato. The median rent for a one-bedroom in the Mankato area is $675, more than 35 percent less than the Minneapolis area, at $1,050.
The Minneapolis Big Build will end in the next two years, most likely. We already have seen projects priced for the ultra-high-income range like Alia on Central Avenue NE and Eleven on 11th Avenue South — where condos start at $1 million — slowly, quietly scuttled even after they publicly say they have financing. Hopefully, the projects already under construction will be completed and occupied. But don’t hold out hope for the Doran three-block project completing this business cycle.
For the rest of the rental market, there is always the churn of class. My building, built in 1964, was intended to be a luxury apartment building to compete against the amenities of the suburban life. Now, one bedrooms rent for around $1,200 a month. Across the street, a five-plus-one apartment building that opened in spring of 2017 has one-bedrooms listed as “$1,816 to $3,528” with rent subject to change. I guess they size you up before they shake you down.