MINNESOTA REAL ESTATE JOURNAL
MREJ.com

VOLUME 33, NUMBER 10
©2017 Real Estate Publishing Corporation
October 2017

Richfield’s Concierge Dazzles with a Disney-like Display of Resident-Pleasing Amenities
By Doug Howelson

Getting to “WOW” is the name of the game at the Concierge apartments in Richfield, Minn. The wow factor plays into just about every facet of the renovation, from the record breaking renovation of the mostly one bedroom apartments, to a complete and total reconstruction and rechristening of the old community “club room” as the Resort Center and Spa. “This 50-year-old property had great bones and was maintained, but due to its age and size, it needed substantial investment to bring its shell into the 21st century,” says Erik Falkman, chief operating officer of Soderberg Apartment Specialists. “I think we have not only accomplished that goal, but have knocked it out of the park on many levels.”

The Concierge wowed the judges for the recently held Minnesota Multi-Housing Association MADACS awards show. Eleven times the Concierge’s name was called for an award, including some of the most prestigious of all: 2017 Property Excellence, and Renovation of the Year. The previous record was five awards in one year.

Meanwhile back at the Concierge, the first, and arguably most important “wow moment” occurs as prospective renters enter the property for the first time. Even as they emerge from their cars in the leasing center parking lot, they have a lot to take in: the massive swimming pool (the largest private pool in the state), the outdoor courtyard and wide-open green spaces. Situated on approximately 22 beautiful acres, there are lots of planned outdoor areas — with something for everyone — including state of the art electric vehicle charging stations.

First impressions do count, especially in today’s ultra-competitive upscale apartment market, says Jim Soderberg, president of Soderberg Apartment Specialists, the Brooklyn Center, Minn. company that manages and markets the property.

“We are constantly trying to improve the experience for our renters,” Soderberg said. Which was just the case, recently, when he announced the opening of the Paw Club, a party room for the Concierge’s canine set. Dog cohabitation is permitted at about 30 percent of the apartments, and the life of a Concierge dog can be a good life indeed. The complex features a 1,000-square foot dog run, two smaller Potty Parks for short visits, an outdoor dog spa with showers for the big dogs, and a bathing area for the smaller ones, even a doggie treadmill and a gumball machine filled with dog treats.

And those are just some of the creature comforts, for animal critters, on offer at the Concierge. The fun doesn’t end, not by design, at the Concierge, for the people who live there either.

“The property appeared pretty bland to me at first,” Steven Hell of Studio H Design recalls. “It needed more color, more vitality” — something that he’s known for, fortunately enough.

The corridors themselves — more than four miles dishing through the five different buildings composing the Concierge complex — had a gloomy, slightly sinister feeling. “They looked like airport corridors looked like in the 1960s and ’70s,” he says.

Out went the old, dark carpeting. In came color-dappled modern carpet squares along with a brand-new LED lighting system and matching door holds, to make the property feel safer.

Granite countertops and stainless steel appliances, both true hallmarks of a Soderberg renovation — are featured throughout the kitchen and dining area, as is the all-new, espresso-hued kitchen cabinetry. The granite arrives in shipments of 53-foot-long cargo containers, trucked in from West Coast port shipping terminals, then deposited for unpacking on the premises of the Concierge. “We had 64 semi-truck loads of cabinets and granite delivered for the renovation,” says Soderberg.

INSANE ONE HOUR RENOVATION

The talented renovation team crossed paths daily during the renovation, but nowhere more memorably than when Soderberg challenged them to beat their existing record of 1 hour, 34 minutes for a complete apartment makeover. They made a YouTube video, narrated by DIY Network television personality Paul Ryan (a Twin Cities native) titled Insane Apartment Renovation. The team came through like champs, completing a total makeover, including replacing the old kitchen, flooring, carpeting, furnishing, appliances and electrical hookups, and installing all the new replacement pieces, in 58 minutes. It was timed, with Ryan narrating and producing a finished video that dramatizes the before-and-after look of the apartments at the Concierge. Since posting it online, the video has gone viral, garnering more than 50 million views.

Of the 45 different and substantial amenities levered into the Concierge to date, about 40 percent of them were not in the original plan. And Soderberg isn’t old tom adding in incremental benefits for residents yet, even though the Concierge boasts the most resident amenities of any apartment complex in the Twin Cities today — and maybe in the country as well, he suspects.

Soderberg and his investor partners — he leaned into the institutional investor market to help fund the Concierge renovation — purchased the apartment complex, then known as the Crossroads at Penn, for $41 million in September 2015. They put another $12 million into the renovation, which is all but complete, according to Soderberg. It marked the largest apartment renovation ever undertaken for a privately-owned apartment complex in Minnesota, he says. “I like to say, no taxpayers were harmed during our renovation,” Soderberg quips.

And the sheer size of the Concierge — it’s the second largest market-rate multifamily property in the state — makes possible the piling on of such a large array of amenities. “It’s an economy of scale thing,” Soderberg explains. “The larger the complex, the more amenities it can support. Tenants can’t believe how much they can get, in terms of all these extra benefits, or amenities, at the Concierge. It is not uncommon to hear people say ‘you’ve got to be kidding me.’ There is so much value to the residents here that prospective renters still demand to know, ‘What’s the catch?’ when touring the property.”

There is no catch, Concierge leasing representatives assure them. What you see at the Concierge is what you get, and it’s all free for residents to use too. “It’s really a resort-style living experience,” says Soderberg.

That might not have been the case a few years back, when the property had a distinctly different look, feel and character. Despite its premium location, at the intersection of Penn Avenue South and the I-494 freeway — just minutes from the Mall of America, Southdale Shopping Center and Minneapolis-St. Paul International Airport — and humongous size, it seemed not so much out of place but underutilized as a commercial real estate asset. At the same time, it was well known to the Richfield Police. Police calls to the property averaged almost two per day in the year prior to when Soderberg and company purchased the site.

“It’s one thing to feel the called to police by 85 percent” since taking control of the property, he says.

Those Richfield before-and-after police numbers came as no surprise to Soderberg’s broker/friend, Tom Cooper. “[Soderberg] took on a project in Brooklyn Center, and saw similar results. I would time the city of Brooklyn Center would want to give him the keys to the city.”

The overall amenity package is otherworldly in variety and scope. From the huge, outdoor swimming pool, ringed by resort-style cabanas, to the 8,500 square foot Resort Center with 3 levels of fitness (Strength, Cardio and Core), to the Amazon-friendly delivery center (now including a cold storage room for delivered-fresh groceries and meals), to the on-site self-serve convenience store, to the 10,000 square foot outdoor dog park, to the beauty salon, yoga studio, 12-seat movie theater, business center and conference room, the four-season outdoor fire pit, the 300 foot long outdoor dance floor (live deejays on occasion), outdoor sport court with tennis, pickle ball, a putting green, shuffle board, and minifit hammocks, and so much more, all free to use and enjoy by Concierge residents.

“And don’t forget the indoor climbing wall,” says Soderberg. “Or the ping-pong table with its ping-pong robot ready to take on all comers, any time, same place, the fitness rooms, the keyless entry system and the high-quality kitchen facilities in the Resort Center for the service simulation, the championship-caliber Football table, really just anything you could want for a social experience.

“It’s a little village unto itself, and by design — we want it to be a social place,” Soderberg agrees as he leads a visitor through a whirlwind tour of the property recently. “Almost anything residents need, they can get in the building.”

“I tip my hat to Jim,” says Gary Brummer a Twin Cities apartment owner and renovator. “He’s got a system in place. He does what he says he’s going to do. And he has the interests of the community at heart.”

The Concierge may be the tip of the iceberg, in terms of prodding more owner/developers of older apartment complexes to renovate themselves — or sell to someone who will.

“A great majority of Twin Cities apartment stock was built in early 1960s, up to 1972,” observes Cooper. “That’s when you had a great migration of people from rural areas to the suburbs. So these properties, a lot of them are 40 to 60 years old now.” Due for a tune-up — if not a total overhaul — in other words. Concierge is at the head of the pack again, with a new lease on life as a high quality, market-rate apartment complex that’s turning heads in the multifamily industry, both locally — as evidenced by the bushel basket full of awards that Concierge staff toted home from the MHA award banquet, and by multifamily owners/investors and brokers nationwide.

As for what’s next, Soderberg and SAS still see plenty of opportunity in the Twin Cities and Minnesota multifamily market. “We’re sticking to our home state,” says Erik Falkman, chief operating officer of SAS. “This is our sweet spot, and there’s a huge amount of aging apartment stock in the Twin Cities. There’s plenty to do here.”