Market Opportunity

In May 2003, Turnstone Group LLC acquired the Calhoun Plaza Apartments, a 109-unit, 9-story building located in the desirable Lake Calhoun area of Minneapolis. Realizing a unique confluence of forces, including an out-of-favor property type, rapid home value appreciation and low interest rate environment, Turnstone Group LLC capitalized on the potential for creating value by converting the luxury rental apartments into for-sale condominiums.

The many existing condominium-like features, such as steel frame construction, building amenity package and open floor plans, as well as the favorable price points, made building conducive to conversion and highly sought after by young professional homebuyers. In addition, this was the first large-scale conversion in the Minneapolis market. The total capitalization of the project was $17.5 million.


Turnstone Group LLC was able to privately negotiate an attractive purchase price directly with a motivated seller, avoiding an auction process. Upon acquisition, Turnstone Group LLC implemented a full-scale renovation plan, including a name change, and established an on-site sales and selection center.

The acquisition price of $112 per square foot, in a market where existing like-kind condominiums were selling in excess of $220 per saleable square foot, afforded Turnstone Group LLC the opportunity to aggressively market the units at pricing below the existing inventory and new construction competition.


The property achieved 50% sellout within three-and-a-half months and 90% within nine months, generating a realized IRR of 204% and a cash flow-to-equity of 3.7x.