Welsh Construction finishes work on Lofts at Mayo Park in Minnesota

Multifamily development the Lofts at Mayo Park in Rochester, Minnesota, held a ribbon-cutting ceremony on Feb. 21. The ribbon-cutting marks the opening of the market-rate apartment complex.

The site is located within the Destination Medical Center Development District located between 107 and 121 Sixth Ave. SE. The four-story project is being developed by Helen and Chris Roland, trustees of the George F. Pougiales Trust. Welsh Construction worked with the Rolands to execute their vision for the short-term and extended-stay residential development near Mayo Clinic.

The ribbon-cutting, hosted by the Rochester Area Chamber of Commerce, included remarks from Laurie Ackerman, Director of Sales and Marketing for Opportunity Services and Chamber Ambassador; Helen and Chris Roland, trustees of the George F. Pougiales Trust; and Judy Braatz, Membership Development Director at the Rochester Area Chamber of Commerce.

“We’re always happy to have additional housing choices in Rochester. The Destination Medical Center Initiative will generate tens of thousands of new jobs. The workforce needed to fill those jobs will require a myriad of housing options,” said Rob Miller, president of the Rochester Area Chamber of Commerce.

The development features 29 units, and was designed by Minneapolis-based Snow Kreilich Architects. Amenities of the Lofts at Mayo Park include modern exterior finishes, underground parking, roof deck patios, a glass-front lobby and conference room and private patios and balconies. Additionally, 14 of the 29 units are fully-furnished for future tenants.

The development is located on Mayo Memorial Park, one of Rochester’s oldest and most well-connected parks. The building’s common spaces provide expansive views of the park, the Zumbro River and downtown Rochester.

Source: MN News

Minnesota architecture firm bdh+young hires project manager

Sue Kimal

Edina, Minnesota-based architecture and interior design firm bdh+young has added a new member to its leadership team.

Sue Kimal has joined the firm as a project manager, bringing 23 years of experience in the design industry to her new position.

Kimal has experience fulfilling clients’ goals, budgets and schedules.

Source: MN News

Oppidan’s new senior living facility opens in Minnesota community

White Bear Heights Senior Living will open April 3. The three-story, 138,000-square-foot development is located on the northeast corner of Centerville Road and Highway 96 in White Bear Lake, Minnesota.

The senior community is owned by national property development firm Oppidan Investment Company, and is managed by Ebenezer Management Services, which provides daily operational and management services.

Built by Engelsma Construction and designed by Pope Architects, White Bear Heights offers seniors a variety of housing solutions, ranging from independent living to customized assisted living options, including care and services that are available 24/7.

The 112-unit senior community consists of 82 senior living apartments and 30 memory care apartments. Tours of the model apartment are now available and can be scheduled by calling 651-653-3288.

White Bear Heights features chef-prepared meals served restaurant style, heated underground parking, bistro, club lounge, hair salon and spa, and library. The community also includes a private dining room, community room, game room, and fitness center offering classes and wellness programs.

Source: MN News

How the tax code rewards you for helping others

Valerie Grunduski

by Valerie Grunduski and Laurice Szydlowski
Plante Moran

Philanthropic taxpayers donate to charitable causes for a variety of reasons, from helping out their local communities, to supporting research into curing certain diseases, to providing aid to groups of people facing difficult challenges. It’s important, then, to keep in mind that the tax code supports philanthropy by allowing an income-tax deduction for charitable contributions.

If you’re considering a donation to charity, you need to understand that what you donate, how you donate, and to whom you donate can affect the amount you’re able to deduct on your tax return. From the charity’s standpoint, the form of the donation may not make a big difference. However, if you have appreciated property, you are generally better off donating the property instead of cash. Common types of appreciated property include real estate, works of art, collectibles, intellectual property, vehicles and securities. 

Make sure your charity is recognized by the IRS

In order for your contribution to be deductible, it must be made to a U.S. organization that meets certain requirements set forth by the IRS. The easiest way to verify that your organization qualifies is to use the service’s online tool, Exempt Organizations Select Check. Once you’re in the tool, you’ll need to pick one of the three search parameter buttons in order to bring up the form where you enter the actual data.

Not all donations are created equal

Laurice Szydlowski

Donating appreciated real estate often delivers a more valuable benefit for both the taxpayer and the recipient charitable organization.

Taxpayer benefits include:

  • If you sell the property yourself, you’d likely incur a large, long-term capital gain taxed at a federal tax rate of 20 percent, a 3.8 percent federal net investment income tax, and suffer a state income tax hit as well. When you follow the proper procedures to donate the property, these taxes won’t apply.
  • Most states will allow you an exemption for their state real estate transfer tax if you transfer the property to a charitable organization.
  • If the property has a high carrying cost that you no longer want to incur, or if developing the property to its highest and best use isn’t cost-effective, a donation can allow you to eliminate these carrying costs without incurring the taxes listed above.

Charitable organization benefits include:

  • The organization may be able to dispose of the real estate for a lower cost, thereby obtaining additional cash for its tax-exempt purpose.
  • The organization may be able to develop the property for use consistent with its tax-exempt mission, such as its own office space, affordable housing, or parks and recreational centers. 

Additional requirements to deduct a gift of appreciated real estate

The most significant tax advantages for a donation of appreciated real estate can only be achieved when the deduction available is based on the fair market value of the donated property. In most cases, the donation may be valued at fair market when the following conditions are met:

  • The donor must hold the property contributed for more than 12 months.
  • For charitable deductions of appreciated real property in excess of $5,000, the IRS requires the donor to file an additional tax form and to attach a signed, qualified appraisal of the property.
  • A qualified appraisal must:
    • Include special required language that’s very specific for property that’s being contributed to a charity.
    • Must be dated no more than 60 days prior to the contribution and must be received by the time the income tax return reporting the charitable contribution is filed.
    • Include a signature from the appraiser on the form that is filed with your tax return.

In conclusion

If you’re considering a charitable contribution of real estate with a fair market value significantly higher than your cost, or if your real estate is burdened with high carrying costs or barriers to development, a donation of the property could provide a significant tax-savings opportunity. It’s important that you understand the tax benefits that are available if you make a charitable contribution of real property, as well as the additional requirements that must be met to qualify for this type of increased charitable contribution deduction.

Valerie Grunduski and Laurice Szydlowski are senior tax managers with Plante Moran, one of the nation’s largest certified public accounting and business advisory firms with locations in Illinois, Michigan and Ohio, as well as internationally. For more than 90 years, real estate clients have relied on the firm to address their most complex challenges and opportunities. To learn more about how Plante Moran professionals can help you, visit plantemoran.com.

Source: MN News

More good news for multifamily brokers, developers: Number of renter-dominated cities keeps growing

Here is some good news for brokers and developers working in the multifamily business: In 21 U.S. cities with a population of 100,000 or more, more than 50 percent of the households are made up of renters, And according to research from ABODO, the number of cities that can claim this is only going to grow.

ABODO earlier this week released a report identifying those major urban areas in which more households rented than owned. Relying on numbers from the U.S. Census Bureau, ABODO researchers found that of more than 400 urban areas with populations of more than 100,000, 21 are composed of at least 50 percent renters.

Now, that number might not seem that great. But ABODO is predicting that the number of renter-majority cities will only continue to grow. The company points to a report from the Pew Research Center saying that 3 million former homeowners moved from owning to renting in 2011. That’s up from 2.5 million who made the same switch in 2001.

There are several cities in the Midwest in which 50 percent or more of the households rent rather than own, according to Abodo. In Columbia, Missouri, for instance, 53.3 percent of households rent, while in LaFayette, Indiana, 52.9 percent rent. In Champaign, Illinois, 52.5 percent of households rent, and in Clarksville in Kentucky and Tennessee, 51.9 percent of households are renters.

What might be most surprising is some of the big cities in which more households don’t rent. In Chicago, for instance, only 36.1 percent of households rent instead of own.

Age, of course, has a lot to do with this trend. According to ABODO, the majority of renters in the company’s list of renter-dominated cities are under 44, with the highest percentage — 24.29 percent — falling between the ages of 25 and 34. Owners are older, with ABODO reporting that 77.16 percent of owners are older than 45.

It matters, too, if a city is a college town. ABODO found that many of the cities on the list are college towns, including, of course, Champaign, Columbia and LaFayette. In these cities, more than 50 percent of renter households were occupied by non-families — many of them, of course, being college students.

What do all these numbers mean? Only that there remains plenty of opportunity in the multifamily sector for both developers and brokers. Renting is becoming the top choice of a growing number of households across the country. And while the majority of cities and communities across the United States remain populated by more owners than renters, you can bet that the number of renters will only continue to increase.

Just look at the centers of such cities as Chicago, Minneapolis, Kansas City, Cleveland and Detroit. In these urban areas — and many others across the Midwest — renting is becoming an ever more popular option. And as the ABODO report shows, this is a trend that isn’t slowing any time soon.

Source: MN News

Want to spend less on commercial construction costs? Build now, not later

Ready to tackle a large-scale commercial construction project? Mortenson has some advice: Build now.

That’s because Mortenson’s quarterly Construction Cost Index predicts that commercial construction costs will rise in six major markets across the country, including three in the Midwest. And that’s a good sign that construction costs across the country will rise in 2017 and beyond, too.

Milwaukee is a good example. According to Mortenson, building owners should plan on an annual increase of 4 percent in project costs during the coming year.

Mortenson predicts a construction cost increase of 4 percent, too, in Chicago during 2017 and an increase of 3 percent to 3.3 percent for Minneapolis.

Rising construction costs are not a new development in either of these markets. Mortenson reported that in the fourth quarter, the construction cost index in Milwaukee rose 1.7 percent compared to where it stood in the third quarter. For 2016 overall, construction costs rose 3.5 percent in Milwaukee, Mortenson reported.

In Minneapolis, commercial construction costs rose 1.1 percent in the fourth quarter of 2016 versus the third. These costs rose a total of 2.7 percent during all of 2016. In Chicago, commercial construction costs rose 4.3 percent in 2016.

The message here is simple: If you want to build, don’t put off your work. The costs of construction should only increase.

Source: MN News

CBRE helps close $70 million sale of Minneapolis apartment complex

CBRE Multifamily has arranged the sale of The Parkway, a 70-unit apartment community in downtown Minneapolis for $6.5 million.

Ted Abramson, Robert Lockman, Keith Collins and Laura Hanneman of CBRE’s Minneapolis office represented the seller, Parkway Property Investors, LLC.

The buyer is local owner TE Miller Development, LLC, based in Eden Prairie, Minnesota. The buyer purchased the building for $93,212 a unit.

The Parkway is located just one block from Loring Park. The building was built in 1917, and 50 percent of the apartments were upgraded before the sale.

Source: MN News

The Boulder Group sells busy Walgreens property in Saint Paul

The Boulder Group has completed the sale of a single-tenant net-lease Walgreens property at 1180 Arcade Street in St. Paul, Minnesota, for $6.5 million.

The Walgreens property is positioned on the southeast corner of Maryland Avenue E and State Route 61 (Arcade Street) in a densely populated residential area of St. Paul. This intersection experiences traffic counts in excess of 30,800 vehicles a day.

Randy Blankstein and Jimmy Goodman of The Boulder Group represented the seller in the transaction, a Northeast-based real estate investor. The purchaser was a California-based investor.

Walgreens has more than 16 years remaining on the lease, which expires in December of 2033.

Source: MN News

Minneapolis’ Kraus-Anderson names new VP of pre-construction services

Dave Lenss

Minneapolis’ Kraus-Anderson Construction Company has promoted Dave Lenss to the new position of vice president of pre-construction services, one of the company’s top executive positions.

Lenss joined Kraus-Anderson in 2012 as vice president of project management, and has helped grow the company’s North Dakota office.

Lenss is a 35-year industry veteran in business development and operations. Before joining Kraus-Anderson, he was the president of Graham Construction Services, Inc., a general contractor based in Eagan, Minnesota. He also served as president of Winnipeg-based general contractor Penn-Co Construction.

Some of Lenss’ recent notable projects include the new 262,000-square-foot Rough Rider Center and 163,000-square-foot high school in Watford City, N.D.; and multiple projects for the University of Minnesota, including the Itasca Biological Station in Itasca State Park, Park Rapids, Minn.; Gore Annex Amundson Hall addition in Minneapolis, and Bee and Pollinator Lab in St. Paul.

Source: MN News