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Posts tagged ‘Condo Buying’

What Is A Minneapolis Loft?

What is a loft?

Lofts are cool, sexy, dramatic fun spaces bristling with character and rich in visual appeal – and that’s why the term is used so loosely by real estate agents. Not everything that’s called a loft is a loft.

Strictly speaking, a loft is a large, open, flexible space in an older industrial, warehouse or office building that has been converted to residential use. Over time the term has been applied to smaller (often very small) spaces, and spaces in which the functional living areas are separated by walls, much like traditional apartments. Units designed in this manner are sometimes referred to as “soft lofts.”

The loft phenomenon began, most say, in Manhattan in the 1960s. Loft development in Chicago began to take hold in the 1970s and lofts proliferated in the late 80s and early 90s. Over time lofts evolved from low-budget spaces in sketchy neighborhoods to sophisticated, amenity-rich buildings and spaces.

Most recent lofts have been of the soft loft variety, with well-demarcated living and sleeping spaces. Balconies and other outdoor living spaces, once rare, have become almost de rigueur in newer developments. Beginning in the mid-90s some of the larger buildings also began to offer services once unheard of in lofts: door staff, concierges, fitness rooms and more.

Not all loft buildings are adaptive reuse conversions. Developers have built new buildings that exhibit many of the features of lofts and thus merit the use of the term.

Loft building construction

Most loft buildings in Chicago are between two and seven stories tall, of either mill timber or concrete construction, with brick exteriors. Some buildings have terra cotta facades and many feature terra cotta ornamentation.

Older loft buildings are usually overbuilt with regard to residential use. They were designed for heavy machinery, storage of weighty materials and more intensive uses.
Loft buildings vary widely in their configuration. More rectangular buildings lend themselves to more desirable floor plans, with more exterior walls and windows and less space devoted to traffic flows. Square buildings and buildings with deep floor plates are often configured to maximize the number of units per floor, resulting in what some have called “bowling alley” floor plans, i.e. long and narrow. The city of Minneapolis amended its light and ventilation requirements in the mid-90s to enable the adaptive reuse of these buildings.

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Loft characteristics

Most true lofts share a number of features that define the loft look.

High ceilings. Most lofts have ceilings heights of 10 feet or greater. It’s not uncommon to find spaces that soar to 20 feet or more.

Open, flexible space. Residents, rather than fixed walls, define the functional living areas. Armoires, bookshelves and entertainment units are sometimes used to separate one living space from another.

Large windows. Most loft buildings were built between the 1880s and 1940, a time when builders were sensitive to maximizing natural light, and often insensitive to energy costs.

Timber or concrete ceilings. The exposed wood and concrete ceilings in industrial buildings add warmth and texture to loft units.

Hardwood floors. Many of Minneapolis’ loft buildings were built with maple flooring. In most cases the flooring became damaged over time and new hardwood flooring was installed when the building was converted to residential use. The better developments have a layer of lightweight concrete over the original floors, to level them and remove unevenness, and also to help dampen sound transmission.

Exposed structural elements. Timber and concrete columns and beams are exposed rather than wrapped within walls or masked by dropped ceilings.

Exposed mechanicals. Electrical conduit, sprinkler system piping, heating and air-conditioning ducts are open to view rather than concealed.

Exposed brick walls are another element that adds warmth and texture. Brick is a poor thermal insulator, but excellent for sound insulation.

All lofts don’t exhibit all of these characteristics. The fewer you find in a unit, the less likely it is that the unit deserves to be called a loft.

Loft issues

The elements that give lofts their aesthetic appeal often give rise to issues that loft buyers need to consider.

Sound transmission between units is a problem experienced by many loft residents. Sound transmission through floors tends to be more of an issue in timber than in concrete buildings. Lateral sound transmission between units can also be an irritant. Most recent developments have taken steps to minimize noise issues, but some have largely ignored them. Make a thorough investigation before purchasing.

Utility costs. Comfort levels. High ceilings, exposed brick walls and large windows can result in high heating and cooling bills. Brick and glass have little insulating value. Exposed ductwork high above the floor may translate to low comfort levels and uneven distribution of heat. Ask your developer to provide a heating cost estimate from the utility company, or ask to see the current owner’s utility bills.Ceiling fans can be very effective at increasing perceived comfort levels, especially in the winter, and are likely to reduce overall utility costs.

Dust. The brick, timber and concrete in loft buildings are usually sandblasted or acid-washed to create a newer, cleaner look. If these surfaces haven’t been properly cleaned or sealed, dust is inevitable and can linger on for quie a while. Rubbing your fingers over the walls should give you a good idea of what to expect after you move in.

Brick, especially brick that has been sandblasted, is susceptible to spalling, i.e. flaking. Brick is porous and absorbs moisture from humidity and from condensation caused by temperature differentials between exterior and interior surfaces. If you have exposed brick walls you can almost certainly expect to be cleaning up brick dust.

Parking. Different parking requirements apply to new and converted structures. The result is that parking is frequently scarce to non-existent with many loft developments. This may or may not be an issue for you, depending on your personal needs and the availability of parking in the immediate area.

Deferred Maintenance. It’s not unusual for loft buyers to find themselves saddled with large special assessments to correct conditions that a developer bypassed The most common defects have involved roofs and facades.

Loft neighborhoods

Residential loft conversions can be found in most of all Minneapolis neighborhoods, where industrial and office uses once flourished.

The earliest loft developments were near downtown (North Loop, St Anthony Main and Mill District.)

Do your research

It’s easy to be distracted by the sex appeal of loft living. Don’t be. Work with a real estate agent, home inspector, attorney, lender team all of whom have experience with lofts in the area you’re considering.

If you’re purchasing a loft, you’ll find every development in Minneapolis at Search Minneapolis Condos—a helpful site dedicated to the downtown urban market.

Loft development has been an activity with low barriers to entry. That’s good for developers, but not good for buyers. Look for a developer with a lengthy track record in lofts and talk to residents at the developer’s previous projects. If your developer is a first-timer at lofts or has only a limited portfolio, pay attention to the architect and the contractor. Their experience can compensate, to some extent, for a developer’s inexperience.

Focus on the basics that are important to resale value for any type of property: location, neighborhood amenities, access to public transportation, the uniqueness (non-commodity aspect) of the property, and its flow and livability. If you’re in love with it, that helps – someone else will be too. And, it’s easier to love a loft than a run-of-the-mill condo.

What Is Motivating Downtown Buyers?

As the momentum of the downtown market starts to pick up spring of 2011 we thought it was pertinent to check out what some members of the investment community are saying.

The Wall Street Journal

Jim Woods wrote an article earlier this year for Market Watch, part of the Wall Street Journal’s digital network. Its title: Why your best investment is a house. Mr. Woods compared the investment potential of real estate against other asset classes such as stocks and precious metals. Here was his conclusion.

One reason your best investment right now could be a home has to do with the relative upside of getting in on an asset class while it’s at the bottom versus buying into other asset classes that could be near a top. Consider for a moment the tremendous upside we’ve seen in stocks, precious metals and agricultural commodities over the past 12 months…

If you’re a long-term investor looking to put money to work, now is not really the best time to get into any of these three asset classes. However, with home sales starting to improve, and with prices now possibly forming a bottom, real estate could well be the asset class that represents the best low-risk buying opportunity out there today…

Mr. Woods went on to talk about the financing portion of the purchase:

Yes, mortgage rates still are near historical lows, but if we see these rates rise, then the cost of a new home could climb significantly. So, now could really be the best time to pull the trigger on that home purchase — and it could also be your best investment right now.

Fortune Magazine

Shawn Tully, senior editor at large for Fortune penned an article last week which was titled: Real estate: It’s time to buy again. In the article, Mr. Tully explained:

Forget stocks. Don’t bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.

Let’s state it simply and forcibly: Housing is back. Two basic factors are laying the foundation for dramatic recovery in residential real estate. The first is the historic drop in new construction … The second is a steep decline in prices, on the order of 30% nationwide since 2006, and as much as 55% in the hardest-hit markets. The story of this downturn has been an astonishing flight from the traditional American approach of buying new houses to an embrace of renting. But the new affordability will gradually lure Americans back to buying homes. And the return of the homeowner will start raising prices in many markets this year.

Bottom Line

Neither of the two media sources mentioned above has ever been accused of cuddling up to the National Association of Realtors. However, both have come to the same conclusion. It’s time to buy real estate. Perhaps we should listen to them.