CEDARst Cos. has landed a batch of financing for its second development in the Minneapolis metro. The company received $170 million in capital that will be used to develop the 358-unit Duffey 2.0. ULLICO provided a $101 million construction loan, while Pearlmark made a $12 million structured finance investment in the project, which also received more than $30 million in tax credits.
Duffey 2.0 will be a multifamily development that consists of both adaptive re-use and ground-up components. The community will offer studio, one-, two- and three-bedroom floorplans that range from 500 to 1,500 square feet. Duffey 2.0’s amenities will include a rooftop lounge and pool, spa and wellness facility, fitness center, bowling alley, movie room, golf simulator, pickleball court that doubles as an ice rink, and co-working spaces.
The developer is planning to include 40,000 square feet of retail space within the Duffey 2.0. Additionally, the plans call for concepts including a rooftop bar and restaurant, and a New York City-style bodega and coffee house that would both be located in the lobby.
CEDARst broke ground on Duffey 2.0 in early July and is expecting to complete the project by the end of 2023. The developer tapped BKV as the project’s architect of record, while RJM will serve as the general contractor.
LITTLE ROOM IN MINNEAPOLIS FOR NEW DEVELOPMENTS
Will Murphy, CEO & managing partner of CEDARst, said in prepared remarks that the barrier to entry for any future developments in the Minneapolis market will be high since there are few land parcels left and any development would be subject to height restrictions or have to deal with landmarked properties. Even for Duffey 2.0, the project was located within the area’s landmark overlay and required approval from the National Park Service for procurement of tax credits at the state and federal level.
However, CEDARst has plenty of experience with similar projects as Duffey 2.0 is the company’s seventh development that uses historic tax credits. As for the area, CEDARst previously developed Duffey, a 188-unit community located nearby.