Wave of the future? Micro units touted for millennial renters.

Minneapolis Star Tribune

Ready to live like a minimalist?

City Club Apartments CBD, a new rental building in downtown Minneapolis, is betting there are a lot of home seekers like you. Many of the 307 units in the building are compact, oneroom apartments with built-in Murphy beds, and the 17-story building has only 20 dedicated parking spaces, making it an outlier in an increasingly competitive rental market.

The Michigan-based developer, Jonathan Holtzman, said the project has been a hit and will serve as a model for future developments.

He said that within months of opening, more than half the units had been leased.

“This community represents the next evolution of that process and thinking and will inform our vision and mix for the communities we currently have under development in Detroit, Kansas City, Chicago and Cleveland,” he said.

Holtzman said the majority of the new apartments that have come online in the last five years have been one-bedroom, one-bath and two-bedroom, twobath units, but “our nontraditional, smaller floor plans are leasing the fastest.”

Holtzman calls the smallest units in the building “nanos.”

One-room apartments, known by many as studios, efficiencies and micro units, are nothing new. During the 1980s, several high-rise buildings were built with one-room apartments and smallish alcove units that have a small anteroom with room for just a bed and a nightstand.

And over the past decade, a growing number of developers are catering to renters who are willing to sacrifice space for affordability.

For many millennials, space to entertain at home is less important than common space where they can congregate with friends and other residents. At City Club CBD, the building is stocked with several gathering spaces, including a 17th-floor rooftop Sky Club with a swimming pool and outdoor kitchen.

For developers, the smallest units typically fetch the highest persquare-foot price, though the monthly rent is lower than one would pay for a one-bedroom or larger unit.

“They’ve made units smaller and smaller in order to help people with their rent payment,” said Gina Dingman, president of Everest Real Estate Advisors in Edina, Minnesota. “Most people aren’t paying attention to their persquare-foot price; they’re just looking at their monthly payment.”

At City Club CBD, nanoapartments range from about 450 to 600 square feet. Rents vary depending on the location within the building. A 450-square-foot unit on the third floor, for example, rents for $1,250 per month. A one-bedroom plus den unit with 875 square feet rents for $1,450.

Mary Bujold, president of Maxfield Research in Minneapolis, said the lack of parking at City Club CBD is unlikely to be an issue given the building’s location near public transportation and within walking distance to shops, restaurants and services.

“Micro units will continue to attract young people, but do not really fit too well for older people who usually want a little more space,” she said.