Reuter Walton, a St. Louis Park-based developer, has acquired a downtown Rochester site for $20 million to construct a 13-story, 342-unit apartment tower named CityWalk Apartments. This project, supported by Tax Increment Financing (TIF), is a significant investment in Rochester's residential development sector.
The CityWalk Apartments will be located at the southwest corner of Second Street Southwest and Sixth Avenue Southwest, near the Mayo Clinic's St. Marys and Methodist Campuses. The site, currently valued at $3.1 million, is expected to surge to a minimum of $86 million post-development. The project will leverage $139 million in private investment, with construction commencing at the end of June 2026 and completion slated for December 2028.
The tower will primarily consist of studios, alcove, and one-bedroom units, with 90 units designated for short-term rentals. The target rent range is set at $1,800 for the affordable side, unsubsidized. Additionally, 67 units will be part of the Rochester-Olmsted County’s 4d program, offering affordability in exchange for lower property taxes. This initiative aligns with the broader trend of urban multifamily developments in the Twin Cities/Rochester area, driven by healthcare growth.
The Rochester City Council, via the Rochester Economic Development Authority, approved the TIF district approximately one month before the site purchase. The project replaces structurally substandard retail and parking structures, enhancing the area's long-term stability. It aims to serve Mayo Clinic users, including employees, patients, and supporters, with its strategic location and rental offerings.
Reuter Walton's project will incorporate sustainable building practices, aligning with the industry's shift towards green construction. While specific details on materials and technology are not disclosed, the development is expected to follow modern standards for energy efficiency and environmental impact reduction.
A comparable project is Sherman Associates' Grain Exchange conversion in Minneapolis, a $120 million project with 232 units, including 186 affordable units. This project highlights the regional trend towards adaptive reuse and office-to-residential conversions, supported by grants for abatement and cleanup.
The CityWalk Apartments project by Reuter Walton signifies a robust momentum in Rochester's residential development market. With substantial private investment and strategic location near a major employer, it underscores the confidence in the region's housing demand, particularly for affordable and short-term rental options.
The construction industry in Rochester is poised for growth, with projects like CityWalk Apartments leading the way. The focus on sustainable practices and the integration of modern construction technology are expected to set new standards in the industry. As the demand for residential spaces continues to rise, developers are increasingly looking towards innovative solutions to meet the needs of the community while maintaining environmental responsibility.
Community engagement is a critical component of the CityWalk Apartments project. Reuter Walton has committed to involving local residents and stakeholders in the planning process to ensure that the development meets the needs of the community. Public forums and feedback sessions will be held to gather input and address any concerns related to the construction and its impact on the local area.
The construction of CityWalk Apartments is expected to generate significant economic benefits for Rochester. The project will create numerous construction jobs during the building phase and permanent positions once the apartments are operational. Additionally, the influx of residents is anticipated to boost local businesses and contribute to the overall economic vitality of the area.
Reuter Walton's investment in CityWalk Apartments is part of a broader vision for Rochester's development. The city is positioning itself as a hub for innovation and growth, with a focus on creating vibrant, livable communities. The integration of residential, commercial, and recreational spaces is central to this vision, ensuring that Rochester remains an attractive destination for both residents and businesses.
