- Real Estate
- Food & Drink
July 16, 2020
From the C-shaped swimming pool at The Cascade downtown, the scene resembles a resort.
Lounge chairs are occupied nearly all hours of the day – including at night, when lights and music bring the courtyard even more to life.
An outdoor kitchen and multiple fireplaces invite grilling and gathering.
A bocci court, converted easily for bean bags, offers more entertainment.
Even the dogs can feel half on a holiday here, with a dog park built into the courtyard that flushes with water with the push of a button.
To say residents are happy with the extra amenities is an understatement, said Drew O’Brien, regional manager for The Cascade developer and property manager Lloyd Cos.
“I don’t even know if an emoji exists to express their feelings. They’re very happy.”
To say the apartment complex itself has been successful is maybe an even bigger understatement.
“It’s amazing,” O’Brien said. “We are currently over 90 percent leased and pretty much the few we have are just a couple in building B, which just opened in March. For that to be where it is right now three months later just blows my mind.”
While The Cascade might be capturing the upper end of the market, the demand for downtown living appears to be at all price points.
Just a few blocks south on Phillips Avenue, the newly renovated Albert House is attracting tenants drawn by an affordable way to live in the heart of the city.
The midrange is popular too, from the newly opened Third Avenue Lofts on the south end of downtown to existing properties that continue to be all or nearly filled with residents.
“I think it just shows people are ready to live in downtown Sioux Falls, and that has slowly become more evident over the last five years, but all of a sudden everything downtown came together,” O’Brien said. “The river walk, the walkability, the restaurants, being able to live and work and play down here, it just call came together at once.”
The fact that the Albert House will be a stop on this Saturday’s Downtown Loft Tour perhaps says as much as anything about how the owners view its next stage in life.
Walk into the property at 337 N. Phillips Ave. and it’s immediately clear: This isn’t the Albert House you probably are picturing.
“We did a pretty significant renovation,” said Kevin Keating, a co-owner in the historic building that is part of the Murray Properties portfolio.
“We did not move any walls, but we were able to open up the lobby area. It had a drop ceiling, and we were opened that up to the original ceiling, and you can see the original crown molding, so it was really cool to see that redone, and it creates a nice community area for residents and guests.”
Take a look at these before-and-after photos.
The owners also brought in new equipment and enlarged the laundry area, and substantially updated the apartments.
Improvements include new flooring, cabinets, countertops, vanities and updated paint colors.
“We really changed the look of the building so it’s much more modern,” Keating said. “As units turn over, we’re going into each unit as tenants leave and renovating. It’s taken a little longer that way, but we’ve been successful.”
Nearly all 47 apartments have been renovated – a mix of micro-studios and one-bedrooms – and some of both are available.
“The micro-studios are all furnished, so we bought updated furnishings and updated the elevator, and we’re pretty proud of it,” Keating said. “We’ve got units available right now, just due to the renovation we weren’t filling units right away and were keeping them available until the common areas were done.”
The smallest units start at about $600, and one-bedrooms are $715. Utilities and parking are included. It’s a market rate property, so anyone can rent these apartments.
“We’re still trying to keep things affordable as much as we can,” Keating said. “We have raised the rent – you can’t do all this without raising rent a little bit – but we’re seeing a good, more discerning tenant who wants to live downtown and be closed to amenities, and we’re no longer just the cheapest place in town. We have a nice property here, and people are recognizing that. They love the location with everything going on around us.”
When Keating and his partners took on their newest downtown project – the Third Avenue Lofts on the south end of downtown – it was based on research that showed “growing demand for quality housing downtown,” he said.
“I think that continues to be the case. We were, rightfully, I think concerned with COVID what was going to happen to the market and not concerned that demand would fall off completely but just that people would be afraid to be making the move now. And thankfully, we’re still seeing decent activity.”
With the Third Avenue Lofts, which opened in April, downtown gains 64 one-bedroom and 23 two-bedroom apartments west of Third Avenue between 12th and 13th streets. The property was developed by Urban Housing Partners and Legacy Developments and will be managed by Murray Properties.
“It’s actually going really well considering the pandemic. We’ve been hitting our goals and having a lot of contacts and interactions, so we’ve been really excited and surprised by the feedback,” property manager Lacey Schmeling said.
Rents range from about $985 to $1,640 per month depending on the floor plan, and underground parking can be added.
“The area has been a big draw for people, being that they are downtown but they don’t necessarily feel like they’re in the epicenter of downtown,” Schmeling said.
“Really, the positive feedback is on the property itself. It’s brand new, it’s gorgeous, there’s amenities like the community room and the indoor-outdoor fireplace, so they can be on a patio, the fitness room and a great price for downtown.”
Schmeling guessed some of the interest is from locals who have had more time available to look for a new place to live. People also continue to move to Sioux Falls, she said.
The community room, equipped for entertaining, already is drawing use, she added.
“We have quite a few residents who go down at night and play shuffleboard and watch TV and have a drink and hang out socially.”
Existing downtown properties also continue to report solid occupancy. The Boyce-Greeley building at 11th Street and Phillips Avenue has one two-bedroom loft with a den available and is on Saturday’s tour, and a one-bedroom expected to be available next month.
“We rarely have openings,” co-owner Dave Dandar said. “We’re proud of the quality of construction and craftsmanship, and it does attract appreciation.”
Next door, The Carpenter Building will be a spot on Saturday’s loft tour, though the owners’ portfolio also is nearly full.
“We don’t have much for vacancy, but it’s important for prospective tenants to get in touch with us and begin that relationship so we know they’re interested when something does become available,” building co-owner Anne Haber said.
She sometimes can find a fit for tenants seeking the downtown lifestyle with The Edge on Main, a building just south of downtown that has a couple of one-bedroom options coming available in August.
Other future tenants could be interested in securing a loft at Railyard Flats, Haber said. It will offer 2o one-bedroom and 21 two- and three-bedroom lofts next year along East Eighth Street on former rail yard property.
“For Railyard Flats, we’re looking to schedule appointments with people so we can help them understand the level of building this is going to be and what a different product this is going to be for downtown,” Haber said. “We’re open to meeting with people to reserve units as they become available.”
While Lloyd’s Cascade is nearly full, it hasn’t compromised vacancy at other nearby Uptown buildings, O’Brien said.
“There was a transition of people in those buildings who came to Cascade, and we were ready for that, but we bounced back in about the time frame we thought,” he said. “It’s very common for all these downtown properties to be 90 to 92 percent occupied all the time.”
For an extra monthly fee, those residents also can take advantage of The Cascade’s amenities.
“Even through COVID, our leasing didn’t slow at all, and I think that almost played into it,” O’Brien said. “People started to realize there will be times you want the same fulfillment as when you go on vacation and you can’t always, so you might as well live in a place where you can do that every day.”
One theme is consistent through Lloyd’s and Legacy’s properties: Smaller spaces are increasingly sought-after.
“We have been wait-listing people for a while on one-bedrooms and studios,” O’Brien said.
“They’re super popular. People are OK with having a smaller apartment – not that these are small, but the popularity of studios and one-bedrooms is so high. They realize they don’t need everything inside the home because they will spend a lot of time outside. We see people in our community rooms doing schoolwork or socializing. They don’t need an office in the apartment.”
The new owners of the Rehfeld’s Art & Framing building originally figured they would find a long-term tenant for the two-story loft above the retail store.
But they shifted the strategy recently to renovate the space and make it available as a shorter term rental for those traveling through Sioux Falls and looking for a downtown experience.
The newly rebranded The Loft on Phillip”at 210 S. Phillips Ave. is geared toward professionals traveling or businesses bringing in guests or looking for a place for workers to stay, “and they want to give them the downtown experience,” co-owner Brad Dietzenbach said.
The 1,500-square-foot loft includes a large rooftop deck overlooking Phillips Avenue. The owners added a separate entrance on the east side of the building for more private access, in addition to the private garage that comes with the loft.
“We’ve just given it a face-lift all over, added new paint and fixtures,” co-owner Rodney Krantz said. “It catches it up to the modern expectations people have of a facility like this.”
The fireplace was redone with large, ceramic tile, a walk-in shower was added and a comprehensive new entertainment system allows for streaming music and TV connectivity throughout the loft.
“The theme was modern Scandinavian,” Dietzenbach said. “So there’s a lot of off-whites and dark contrasting colors. Everything is updated.”
The two-bedroom, two-bath loft will be available for bookings in early August through vacationhomerenter.com.
It can be rented for two nights’ minimum or for a more extended time, even up to a couple of months. Cleaning service will be provided as needed for extended stay, and the daily rate will vary depending on the season and length of stay.
“We think the uniqueness of the property fits a lot of parties,” Krantz said. “If professionals are coming to town and need to be here a couple weeks, they would have access to this. If a family is coming to town, we feel it’s very family-friendly.”
Downtown Sioux Falls Inc. will host its Downtown Loft Tour from 11 a.m. to 3 p.m. Saturday, featuring 11 locations, including some virtual tours. For details, click here.
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