Converting a century-old bank building from office space into modern apartment units has been heralded as a major win for urban redevelopment in the Twin Cities.
In recognition, the conversion of Groove Lofts at Northstar Center earned a 2025 CoStar Impact Award for redevelopment of the year in Minneapolis-St. Paul, as judged by real estate professionals familiar with the market.
Groove Lofts was a $98 million project financed through federal, state, city and local funding sources. Federal and state historic tax credits played a crucial role in making the project financially viable. About 95% of the project cost was covered by private investment, with the remaining 5% from public funds.
The project to convert Northstar Center East from office space to Groove Lofts at Northstar Center began on May 16, 2023, and took just 16 months. The multifamily building opened to potential residential tenants on Oct. 10, 2024.
Groove Lofts connects directly to the rest of the Northstar Center campus, with access to the general store, cafeteria, a parking ramp, Hotel Indigo Minneapolis Downtown and Star Bar & Bistro. Residents can also use a four-way sky bridge that joins Capella Tower, Rand Tower, Wells Fargo Center and Baker Center, linking both business and retail hubs.
About the project: Groove Lofts at Northstar Center is a 216-unit multifamily building at 608 Second Ave. S. in downtown Minneapolis. The 10-story property has an average unit size of 1,038 square feet and a mix of studio, one- and two-bedroom apartments, with one four-bedroom suite. Its 16-month conversion began in 2023.
The building's owner, Minneapolis-based Sherman Associates, acted as the developer on the conversion project and manages the multifamily units. Sherman Associates bought the property in May 2023 for $6.2 million. Northstar Center East was built in 1917.
What the judges said: Judges agreed that the redevelopment of Groove Lofts at Northstar Center brought "vibrancy" and "impact" to the Minneapolis market.
"Great adaptation of office into housing. More of this will likely happen in Minneapolis, and this will be a good example to those that follow," said Jim Rock, a senior vice president with Colliers.
"This is the first downtown MSP conversion post-pandemic and will be very impactful to reviving the downtown core community." — Keith Sturm, CEO/principal, Upland Real Estate Group, Inc.
"Office-to-multifamily conversions will be an important factor in the resurgence of downtown Minneapolis. This project was beautifully executed and will serve as inspiration for future conversions in the CBD." — Brent Karkula, managing director, JLL
"The adaptive reuse of office to housing, featuring a four-way skyway connection for residents, an affordable component with 20% of units at 50% of AMI, and dedicated amenity space. Brings more people to downtown Minneapolis." — Susan J. Picotte, senior vice president of asset management and operations support, Centerspace
They Made It Happen: Jackie Miller, senior associate and project manager at RSP Architects; Meghan Elliott, founding principal at New History; Jake Boerboon, senior project manager at Kraus-Anderson.