Market Opportunity

The follow-up project to Turnstone Group LLC’s successful Calhoun Place condominium conversion was RiverWest. Acquired in September of 2004, RiverWest was an upscale, 416-unit, 20-story rental apartment building located on the banks of the Mississippi River in the Historic Mill District of Minneapolis. At the time the opportunity was presented, apartment fundamentals in Minneapolis were weakening because of the flight to home ownership, which was driven by strong home price appreciation and attractive financing for first-time homebuyers. RiverWest presented a unique opportunity to purchase an asset in a high-quality location, offering breathtaking views of the Mississippi River and the downtown Minneapolis skyline. Furthermore, RiverWest offered features more commonly seen in luxury condominium offerings, such as a full fitness center, swimming pool, and two party rooms. The total capitalization of the project was $75.5 million.


The seller of the project was a local owner and developer of rental housing and had not historically been a participant in the for-sale housing market. As a result, Turnstone Group LLC was able to engage the seller and privately negotiate the transaction, resulting in an acquisition price far below replacement cost and below the stabilized apartment value.

Upon closing, Turnstone Group LLC initiated a renovation and repositioning plan focused on the underserved first-time homebuyer segment, while offering fully renovated, first-class amenities in line with luxury new construction condominium projects. The $17 million renovation plan included full unit renovations, updating of the common areas and improvements to the exterior of the building.


RiverWest achieved a 50% sell-out in nine months, resulting in a payoff of the project’s debt well ahead of schedule. The project attained a realized IRR of 89.9% and a cash flow-to-equity multiple of 4.1x.