Developers of the Skyscape Condos Cash Out
Twin Cities Condo News
Tandem Developers, a Chicago based development firm, whose Minneapolis condo project known as Skyscape has reportedly sold their remaining unsold condo inventory to a local investment group called Opportunity Advisors (Minneapolis St. Paul Business Journal, 1/6/10, Sam Black). The terms of the sale have not been released to the public yet but the Star Tribune estimates that the sale included approximately 30% of the homes at Skyscape.
Tandem Developers began selling Skyscape condos in the fall of 2004, after the success of its neighboring Elliot Park high rise tower, Grant Park Condominiums. Shortly after sales at Skyscape were launched, the Minneapolis condo market found itself having only one component of the supply and demand equation and unfortunately it wasn’t demand. 2005 marked the peak of home values in the Twin Cities and gone were the speculators, bidding wars and the condo frenzy that caused developers to dive into the market.
Since 2005 many developers have rushed to wrap up their projects and shift their focus to rental housing or other areas that have shown signs of strength in a weaker economy. Skyscape is a massive project with 248 condo units and a significant commercial component as well thus making a quick exit not very feasible. Tandem Developers successfully demonstrated a strong financial ability to carry a project of Skyscape’s size through a difficult housing market, which unfortunately is a feat not always accomplished, as we’ve come to find out with other projects like the Ivy Tower and Loop Calhoun. Responding to the changing market with price reductions, buyer incentives and renting unsold condos were some of the strategies that helped carry them through this market.
Opportunity Advisors, a very well funded investment group, has waited patiently on the sidelines for the right opportunity to unfold. After tracking the successes and struggles of numerous condo projects in the Twin Cities, they have now entered the Minneapolis condo market in a big way. Ted Glasrud Jr, the founder of Opportunity Advisors, is certainly no stranger to success in development. His family’s business has successfully developed countless projects in the Twin Cities, including the nearby mixed-use development, Centre Village.
I believe this sale now leaves Minneapolis with only local developers hammering out the remaining condo projects still under construction. Tandem Developers were one of only two national condo development groups that I recall planting roots in Minneapolis during the condo boom. Crescent Heights being the other major developer without local ties, which renovated the Falls Pinnacle Condominiums on the East Bank of downtown Minneapolis and wrapped up sales in the summer of 2008.
It will be interesting to see if Opportunity Advisors pursues any other Minneapolis condos and whether they shift to a buy-and-hold strategy or continue to chip away with sales. In any case we will miss Tandem Developers and appreciate their contribution to the Minneapolis condo market and we welcome Opportunity Advisors to the game.
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