A few blocks from the Mall of America, construction began Wednesday on an apartment building that will have 394 units, becoming one of the biggest in the Twin Cities.
IndiGO, which is being developed by Lennar Multifamily Communities, will sit at the southwest corner of 34th Avenue S. and American Boulevard E. in Bloomington. It's so large that tenants can choose between two light-rail stops to commute into the city.
The project is part of new wave of housing development that's shifting from downtown Minneapolis and St. Paul to inner-ring suburbs, where there's been a dearth of apartment construction.
"With the lack of housing in this area, we have a lot of confidence in this site," said Peter Chmielewski, Lennar's vice president of development.
Across the 13-county metro area, the average vacancy rate during the second quarter was 2.5 percent — far below equilibrium. In the southeast suburbs, which includes this section of Bloomington, the vacancy rate averages 1.8 percent, according to NAI Everest, a commercial real estate brokerage.
"Most of the suburban rental housing is more than 30 years old," Gina Dingman, NAI's president, said. "So there's a real need for newer product and there's plenty of pent-up demand in the suburbs."
IndiGO, a name that nods to the project's proximity to public transportation, is a single six-story building designed by ESG Architects in Minneapolis. It will be built in several stages with the first residents expected to move in during the fall of 2016.
Only one or two Twin Cities apartment complexes exceed the unit count at IndiGO. Most have fewer than 200 units.
