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.

With the airport, mall, hotels and some offices nearby, the building is in an area that tends to attract a much broader cross section of renters than most metro submarkets.

Lennar designed the building and its apartments with a variety of amenities, finishes and rents. Chmielewski said rents haven’t been set, but because the project is being developed with tax-increment financing, some units will be income-restricted.

Given the rising competition and increasingly high expectations among renters, the company will equip the buildings with what Chmielewski says is one of the most ambitious amenity packages to date. That includes two lobby lounges, spas and saunas and a top-floor club room with a “lookout” patio. There will also be four courtyards, a resort-style pool deck, a heated outdoor dog walk area and a playground. It also will have a Zen garden and an open lawn with games.

The project is part of Bloomington Central Station, a master-planned, 50-acre transit-oriented development that’s being developed by McGough Development. There is already a two-acre park that serves as an anchor for the development, a HealthPartners tower and the Reflections condominiums. A Hyatt Regency hotel is scheduled to open in early 2016 and there are plans to build more housing just south of IndiGO, where an additional 2 million square feet of office space has been proposed.

Dingman said that given the popularity of light rail, especially for commuters, she expects that much of the suburban housing development that will take place will happen on sites that are within walking distance to light rail.

“Proximity to the bus used to be the biggest driver,” she said. “Now it’s light rail.”