A South Dakota developer who has three Rochester apartment complexes in the works is expanding into the less expensive market of St. Paul by buying the Pioneer Press building.
Stencil Homes, of Sioux Falls, S.D., bought the newspaper's eight-story headquarters at 345 Cedar Street on Friday. Developer and builder Nate Stencil says he plans to convert it into 150 to 168 market-rate apartments. Rochester Realtor Merl Groteboer, of Re/Max Results, handled the purchase for Stencil.
The newspaper plans to announces its moving plans soon. Stencil hopes to begin construction in early 2016.
The purchase price was not released, though the building had been listed at $4.2 million. Whatever the price, it mostly likely was not close to the premium prices that downtown Rochester properties are selling for amid the Destination Medical Center boom.
"After hanging out in Rochester for a few years, things were looking pretty cheap up there (in St. Paul)," said Stencil on Monday. "After establishing a presence in Rochester, we couldn't help but look at more opportunities in the area. This is a good opportunity."
St. Paul real estate certainly looks to be more affordable than in downtown Rochester. Bloom International Realty paid $7.7 million for the seven-story Associated Bank Building at 206 S. Broadway in downtown Rochester in 2013. In 2014, the three-story Brackenridge Skyway Plaza at 21 Second St. S.W. was purchased by Baheya LLC for $10 million.
Stencil has two apartment complexes under construction in Rochester, Nue52 (formerly called Woodland Park) and Kascade Place, plus a third one in downtown that's still in the planning stages.
He expects the 83-unit Nue52 to be ready for tenants late this summer. It's at Rochester's 65th Street Northwest interchange across U.S. 52 from the North Menards store. Stencil describes Nue52 as it architecturally will be similar to the Metropolitan Marketplace complex in downtown Rochester.
Work on Kascade Place, which is near Nue52, is in the early stages. It will have 96 apartments. Stencil estimates it should be completed by the first quarter of 2016.
Details of the largest project, a $15 million, 110-unit apartment complex near downtown, still are being worked out at this point. Stencil and his partner, Sean A. Kaufhold, previously announced that they plan to build a six-story apartment complex with street-level retail space on Third Avenue Southeast and Fourth Street. That's across from the Olmsted County Government Center and Rochester City Hall.
To clear the way for that project, Stencil Homes purchased three buildings — Buckeye Liquor, the empty Flowers By Jerry shop and the former 3rd Avenue Pet Hospital — in 2014. The company previously had planned to have construction underway by now, but nothing has been done yet.
"We've met with the neighborhood. Now we're doing some re-tooling. We're trying to gauge what everyone would like to see," he said. "We're hoping to start by the first of the year."
Those apartments, along with the Kascade Place apartments, will be priced comparably to other market-rate units in Rochester, he said. That means rents ranging from $900 to $1,000 per month.