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St. Paul downtown population to see significant growth by 2020

Real estate developers, like stock market traders, like to buy low and sell high. But in the years following the banking and mortgage crisis and the significant decline in real estate valuations that followed, many have grown cautious.  They hope to avoid the "irrational exuberance" that struck the market and left many participants with troubled investments.

St. Paul is currently undergoing a downtown residential renaissance, as former office buildings are converted to apartments or condominiums. The Metropolitan Council projects that the downtown population could grow from about 6,600 in 2010 to more than double by 2020 at more than 14,000. This rate of growth is expected to outpace Minneapolis and put further pressure on existing properties, leading to more conversions.

In addition to worries over the strength of the market, there are a host of practical issues. Conversions may be less expensive than new buildings, but they come with a host of issues, both structural and legal, ranging from financing, zoning and building codes to asbestos abatement and parking issues.

One concern raised is whether the market for residential units will become oversaturated. Another concern is the issue of space for a new office project or tower and worries that there won't be room for this type of development.

However, with a 17 percent vacancy rate, it appears at the moment that there is still plenty of room for office space. Others counter that as the population of downtown St. Paul grows, it will drive more jobs as retail and restaurants will follow that population growth.

Of course, any extreme can become detrimental and hazardous, but with millennials continuing to show a preference for urban areas with walkability and transit options, downtown St. Paul is likely to see an additional influx of residents.

Source: twincities.com, "As downtown offices become homes, is there still room for jobs?" Tad Vezner, Sarah Horner and Dan Bauman, April 4, 2016

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