City Center, Angelo Gordon JV Buys 320 KSF Office Space in Minneapolis
- Feb 25, 2013
A joint venture of City Center Realty Partners L.L.C., of San Francisco, and Angelo, Gordon & Co., of New York, has acquired the 320,000-square-foot office portion of the Plaza Seven building at 45 S. Seventh St. in downtown Minneapolis, the companies announced late Thursday.
The Class A office building occupies floors 18–36 of the Plaza Seven mixed-use tower, which is in the Nicollet Mall corridor and connected to the city’s skyway system. The purchase includes the building’s 315-space heated underground parking garage.
The Plaza Seven tower also includes retail and a Radisson hotel, which is undergoing renovations to become a Radisson Blu.
The office portion will be managed by City Center Real Estate Services, a CCRP affiliate, and leased by Jones Lang LaSalle.
CCRP plans to undertake an extensive elevator modernization project for the building, as well as potentially making other building improvements, CCRP president Mark Stefan told Commercial Property Executive. He added, however, that the office building’s previous owner, Carlson, of Minnetonka, Minn., had recently completed renovations of the public areas.
The offices’ current occupancy is about 60 percent, said Stefan, who called his company’s purchase of the building “a lease-up play,” noting that CCRP was attracted by Plaza Seven’s “great location.”
In all, Stefan said, “We like the Minneapolis market long-term.”
CCRP’s other Minneapolis properties include the 350,000-square-foot TractorWorks building, a former John Deere tractor factory at 800 N. Washington Ave. in the North Loop neighborhood, and the former Superior Plating site, a 5.5-acre parcel acquired last June.
And there appears to be a bit more to like in Minneapolis lately, according to a fourth-quarter 2012 report from JLL. The office market in the Minneapolis CBD includes about 14.3 million square feet of Class A space, which currently has an average total vacancy of 11.3 percent.
Though net absorption in 2012 totaled only 71,500 square feet, or 0.5 percent, no office space is currently under construction in the CBD, and the JLL report expects upward pressure on rents. For example, Plaza Seven is cited as one of the few buildings with available contiguous spaces of 75,000 square feet or more. The current average Class A asking rent is $29.27.