Multi-family developments selling green have an advantage — now and if the market shifts



by Dan Rafter

Think of all the multi-family buildings across the Midwest that are now advertising their green features as a main selling point. In the Twin Cities market of Minneapolis/St. Paul alone, the new multi-family development 222 Hennepin has attained LEED Silver certification, while 7West has notched LEED Gold certification.

The Dock Street Flats multi-family development in Minneapolis touts its eco-friendly design and high walkability factor, while the Third North Apartments here boasts of its e-car charging stations and high-efficiency heating, cooling and lighting systems.

There’s one thing, though, that all of these green multi-family buildings in the Twin Cities have in common: They all boast high-efficiency windows.

This doesn’t surprise Jay Sandgren, sales representative at the Edina, Minn., office of Andersen Windows. High-quality, energy-efficient windows are becoming a must-have in modern multi-family buildings, he says.

And those developers that don’t call for high-quality windows in their apartment buildings? They might find themselves trailing their competition.

“The apartments being built today are like condo-wannabes,” Sandgren said. “Some of the apartments being put up today are being built by the traditional companies that have built and operated apartments for the last 20 years. But some of the properties are also being put up by the same people and development teams who eight years ago were leading the pack with all the condos being built. They are putting in condo-level amenities in these apartments, including the windows.”

Of course, there’s no guarantee, Sandgren says, that these buildings will remain apartments forever.

“You can almost see that these buildings will turn into condos one day when the market shifts away from renting and to owning again,” Sandgren said.

222 Hennepin

222 Hennepin

Will that happen in the Twin Cities? How many of the new multi-family buildings here will be converted to condominiums if consumers once again decide that owning is a better option than renting?

No one knows the answer to this question. But the debate between renting and owning will continue. And those apartment buildings that already boast high-end amenities — including energy-efficient windows — are more likely to one day make the conversion to condos, if that’s what the market calls for.

For now, though, Sandgren is happy that so many multi-family developers are calling for higher-quality windows. Projects like 222 Hennepin and 7West in Minneapolis use the Andersen 100 Series windows. These are made with reclaimed sawdust and recycled glass. They are also energy-efficient and dampen outside noise.

They’re a good fit, then, for multi-family projects that advertise themselves as green.

Demand for such windows is so high today that Andersen plans to expand its manufacturing facilities in Bayport, Minn. Andersen announced earlier this year that will spend $18 million to expand its production facilities in Bayport. Andersen will purchase new equipment for the plant and renovate a large chunk of it. Much of the production here will focus on the Andersen 100 Series line of windows, which has become a favored choice among commercial developers.

Overall, Andersen today operates 15 plants across the country.

Sandgren says that he expects the demand for energy-efficient windows to only increase. A recent survey by the National Association of Home Builders found that 54 percent of the firms building new multi-family developments are shooting for green status in 15 percent of them.

“We don’t know when the demand for multi-family buildings will slow,” Sandgren said. “In some ways, it feels like a bit of a bubble right now. But the demand for these apartment units doesn’t seem to be letting up at all. I thought we’d see the end of it a year ago. But that hasn’t happened. This might be a real demographic shift in what people are looking for in all parts of the country.”

This entry was posted in Minneapolis commercial real estate, Minnesota real estate, multi-family and tagged , , , , , , , . Bookmark the permalink.

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