Since 2010, hundreds of apartment units have been added to Des Moines’ central business district through the redevelopment of warehouses and office buildings into multifamily residences.

This week, Ruan Inc. announced that 200 more apartments would be added to the mix when the 14-story Two Ruan Center at 601 Locust St. is converted from office space to multifamily.

“In the last six months, we’ve seen a lot of interest in plugging in more residential units downtown,” said Cody Christensen, Development Services director for the city of Des Moines. “We lean on the development community to tell us what the market is demanding, and right now, it’s more downtown residential.”

Since 2010, more than 1,300 residential units have been added downtown through the redevelopment of at least 19 properties to multifamily, a review of data supplied by CBRE Inc. shows. At least four other downtown properties were redeveloped between 2004 and 2009, adding over 300 residential units to the area. Among the properties that have been recently converted are the:

·        Former Register and Tribune building at 717 Locust St. that was redeveloped from office space to 164 apartment units in 2016.
·        Des Moines Building at 405 Sixth Ave. that was converted from office space to 136 apartments in 2014.
·        A warehouse at 350 S.W. Second Ave. that was converted to 44 apartments in 2013.
·        Equitable Building at 604 Locust St. that was converted to 146 apartments in 2016.

Block Real Estate Services and Foutch Brothers, both located in the Kansas City, Mo.-area, were involved with the redevelopment of the Equitable Building. Both companies have formed a joint venture with Ruan Inc. to redevelop the mostly vacant Two Ruan Center.

Transforming the Two Ruan Center into multifamily units will take more than 200,000 square feet of vacant office space off the market, Christensen said. Currently, 17.52% of office space downtown is vacant, according to a market report by CBRE Inc.

Two Ruan Center’s redevelopment will bring at least 200 additional people downtown, Christensen said. “That means more foot traffic and more people to support local businesses. Adding to downtown’s vibrancy is key to attracting talent and investment to the area.”

Discussions about the conversion of Two Ruan Center to multifamily began over a year ago, said Aaron Mesmer, senior vice president of development and acquisitions for Block Real Estate Services. “I think they saw our success with the Equitable Building, and when the Ruan family decided it was time to do something different with [Two Ruan Center], we were introduced to each other.”

Over 95% of the apartment units in the Equitable Building are leased, Mesmer said. “People want to live there. They want access to the nightlife downtown offers. … The number of new units that have come online downtown since the pandemic has really slowed. There’s been a few, but you can count them on one hand. Demand is still there.”

In the first six months of 2023, 3.7% of apartment units in Des Moines’ downtown core were vacant, according to CBRE Inc.’s multifamily market report. In the East Village, the area between the Des Moines River and Iowa Capitol building, the vacancy rate is 4%. The apartment vacancy rate in the Greater Des Moines area was 4.82%, according to the report.

Ages of residents in the Equitable Building range from people in their mid-20s to someone in their late 80s, Mesmer said. “We have people who work downtown who live in the building. We have people who work in the suburbs who want to live downtown. I think we’ll see the same thing happen at the Ruan property.”

Redevelopment of the property likely won’t begin until late 2024 or early 2025, Mesmer said. The project is in the middle of going through the process of obtaining Historical Tax Credits. It also needs several different approvals from the city of Des Moines, he said.

It’s not yet known how much redevelopment of Two Ruan Center, which has over 256,200 square feet of space, will cost, Mesmer said.

Amenities in the building will include a state-of-the-art fitness center, co-working office space, a skywalk-level club lounge with a community kitchen and gaming areas, and a rooftop patio with a dog park, Mesmer said. Some parking will be available under the building. Arrangements will be made with nearby garages for additional parking.

The property is valued at $6.7 million.

Two tenants in Two Ruan Center – Smokey D’s BBQ and La Mie Elevate, both located in the skywalk level – will not be affected by the renovation of the building, according to a news release about the redevelopment project.

MORE ONLINE

Downtown buildings redeveloped to multifamily
Since 2004, at least 23 downtown Des Moines properties have been redevelopment into multifamily housing, adding 1,600 apartments to the area. Click on the pinpoints to learn more about properties that have been redeveloped from office space and warehouses into multifamily residences.