Portland Tower - 516 S. 8th St.

[John]

A condo with cheap finishes screams equitybuilding opportunity.

Not really. If you own it, you can do almost anything you want to the interior. It's very different than renting. Over time people tend to update their condo space with higher end finishes , appliances etc. to fit their needs better. And when a unit changes ownership, many people remodel, even taking down non load bearing walls to dramatically change the space configuration. As long as the condo complex is in a desirable area, has a good association, and has a concrete frame it will likely build equity. At least that's been my experience as a condo owner.

[twinkess]

A condo with cheap finishes screams equitybuilding opportunity.

Not really. If you own it, you can do almost anything you want to the interior. It's very different than renting. Over time people tend to update their condo space with higher end finishes , appliances etc. to fit their needs better. And when a unit changes ownership, many people remodel, even taking down non load bearing walls to dramatically change the space configuration. As long as the condo complex is in a desirable area, has a good association, and has a concrete frame it will likely build equity. At least that's been my experience as a condo owner.

I think you two agree?

[mattaudio]

Yep, that was exactly my point.

[MNdible]

I couldn't tell if Matt was being serious or not.

It would be interesting to compare, but my sense is that condos in Minneapolis haven't performed nearly as well as SFH's over the last 30 years. Does anybody have any idea what condos in a nice area like the Loring Greenway would have sold for when new?

[aeisenberg]

Sales price over the last 10 years for condos in various downtown neighborhoods:
http://northstarmls.stats.10kresearch.c ... 1/t4kt-xe4

Price per square foot over the last 10 years for condos in various downtown neighborhoods:
http://northstarmls.stats.10kresearch.c ... 1/t4kl-0rX

[aeisenberg]

I couldn't tell if Matt was being serious or not.

It would be interesting to compare, but my sense is that condos in Minneapolis haven't performed nearly as well as SFH's over the last 30 years. Does anybody have any idea what condos in a nice area like the Loring Greenway would have sold for when new?

I don't know about that. I don't have 30 year data, but I can tell you that over the last 10 years, at least, Minneapolis condos have recovered more value than SFHs:

http://northstarmls.stats.10kresearch.c ... 1/t4kx-KE2

[MNdible]

That's interesting, but obviously there's a lot of noise in there from both the great recession and also the fact that there were a lot of new, very high end condos that were coming on the market during parts of that period.

What I think would be great if we could try to isolate the performance of existing condos in desirable locations over a longer period of time, relative to SFH's.

My anecdata is that you can get some real steals in older condos, and that's not just because they need new paint and cabinets. But the fact that you can get real steals also suggests to me that they haven't been appreciating at the same rate as other properties.

[FISHMANPET]

Anecdotally I've heard that condos don't hold/build value as well because association fees throw a big wrench in how much you're spending on mortgage+fees vs how much equity you're building.

[kirby96]

But that's on a $/sq. ft. basis, on a perentage basis aren't they roughly the same (and it looks like SFH may have even recovered a little stronger)?

[go4guy]

Did condos tank more than SFH during the beginning of the recession? I did a lot of condo lending on the west coast during the recession, and condos seemed to have tanked a lot more out there than SFHs. Especially in markets like Vegas and Phoenix. Obviously those markets are much different than here, so was just curious.

[John]

Anecdotally I've heard that condos don't hold/build value as well because association fees throw a big wrench in how much you're spending on mortgage+fees vs how much equity you're building.

That's why researching a building's condo association prior to buying into a building is important. You want to make sure it's well run and financially sound. It should have a large reserve if needed for major repairs to the building. If that's the case , you should see your association fees rise very modestly without becoming a burden.

[John]

Yep, that was exactly my point.

Sorry Matt, but I misinterpreted your comment. We are in agreement.

[twincitizen]

My buddy and his father bought a 1st floor condo at one of the twin residential towers in Loring Park close to I-94, and he basically has a private backyard, since his sliding glass door opens up to the yard and nobody else seems to use it. So he like the best of both worlds (suburban ideology, urban setting), and he got it for ~$100K. It's only 1 BR/1 BA though.

For whatever reason, condos in those towers (400 & 410 Groveland, right?) are remarkably cheap, and have remained cheap despite the dearth of condos on the market. Wassup with that? They don't allow cats or dogs whatsoever, so that suppresses demand from like >50% of the population, but I doubt it has too much effect on the value of these units. It's a phenomenal location, and the two buildings have rooftop pools and other nice amenities. I'm not sure why their values have been held down so much, though as some of you hinted, the very high association dues are probably playing a role there.

(I'm curious what people think about that pet ownership angle...Literally more than 50% of US households cannot consider living in these buildings)

[xandrex]

Some of my friends were condo shopping and either looked at those or one right across the street. From what they told me, they knocked whichever places they were looking at in the area off the list because you could very much hear the highway. That's gotta play a big factor.

[mnmike]

400 and 410 Groveland have about the highest association fees that exist here!! It's almost like it is a co-op (where low sale price, high membership fees is how it works), but as far as I am aware...just a normal condo association set up, with very high fees. Last I saw I think they were around 700/month! Close to the same as the mortgage for a lot of the units.

[aeisenberg]

My buddy and his father bought a 1st floor condo at one of the twin residential towers in Loring Park close to I-94, and he basically has a private backyard, since his sliding glass door opens up to the yard and nobody else seems to use it. So he like the best of both worlds (suburban ideology, urban setting), and he got it for ~$100K. It's only 1 BR/1 BA though.

For whatever reason, condos in those towers (400 & 410 Groveland, right?) are remarkably cheap, and have remained cheap despite the dearth of condos on the market. Wassup with that? They don't allow cats or dogs whatsoever, so that suppresses demand from like >50% of the population, but I doubt it has too much effect on the value of these units. It's a phenomenal location, and the two buildings have rooftop pools and other nice amenities. I'm not sure why their values have been held down so much, though as some of you hinted, the very high association dues are probably playing a role there.

(I'm curious what people think about that pet ownership angle...Literally more than 50% of US households cannot consider living in these buildings)

Yeah, Groveland is weighed down by extremely high association fees. Mine are $230/month, including internet. A similarly sized condo at Groveland is over $700. And also, they're limited by the units themselves-- low ceilings, small rooms, etc, small porch, right over the highway, etc. They've got lots of lux amenities-- security, rooftop pool, etc, but the units themselves... not a lot to get excited about.

[aeisenberg]

400 and 410 Groveland have about the highest association fees that exist here!! It's almost like it is a co-op (where low sale price, high membership fees is how it works), but as far as I am aware...just a normal condo association set up, with very high fees. Last I saw I think they were around 700/month! Close to the same as the mortgage for a lot of the units.

I was going to say the same thing! It's like a co-op, but not.

So.... Portland Tower, eh?

[nickmgray]

back on topic....

What type of retail would you like to see go in on the ground floor of the building. Looks like it's not that large of a space. The obvious choices are a coffee shop or convenience store. I honestly don't think the space would get leased until something goes in across the street,

[grant1simons2]

Wells Fargo. Let them make a plan to vacate their half block lot and sell it to a developer then have them mover here! But realistically, a cafe or convenient store would work well.

[GrowMPLS]

Some of my friends were condo shopping and either looked at those or one right across the street. From what they told me, they knocked whichever places they were looking at in the area off the list because you could very much hear the highway. That's gotta play a big factor.

Can you imagine how property values would jump if they ever put a lid over the freeway there? I would love to see that happen from the tunnel all the way down to Chicago Ave....maybe further.