Beacon Investment Properties working with Harel Insurance Investments & Financial Services Ltd. and Menora Mivtahim Insurance Ltd. in a joint venture, have bought a Class A office property in Minneapolis, Minnesota for just over a quarter of a billion dollars. The 1.4 million sq ft foot IDS Center was purchased from Inland American Real Estate Trust.
Thomas Dunsmore, a senior vice president with NAI Everest, a commercial real estate services firm, said, “It’s a downtown property, it’s the premier property in Minneapolis. The IDS building obviously is a trophy property so there’s going to be an intrinsic value.”
Inland bought the building in 2006 for $277.9 million. The company is pressing ahead with plans to reposition its portfolio. The REIT wants to focus on the retail, hospitality and student housing sectors. The distinctive skyscraper was put up for sale and the commercial real estate and capital markets firm HFF was engaged to help find a buyer.
Dunsmore went on to say, “Minneapolis is attracting a lot of investors that have been priced-out of the top-tier markets. There are better cap rates and I think you’re seeing that there’s existing money that’s chasing properties here, and now there’s outside money chasing properties here.”
The office tower was designed in 1972 by architect Philip Johnson. It is located at 80 S. 8th Street in downtown Minneapolis. The building is 93 per cent leased and has a very strong tenant base. More than 30 of its occupants have been in the building for two decades or more. The property also includes the Crystal Court retail plaza, which is fully leased.
HFF has worked with Beacon and its partners to arrange a 10-year, $182 million financing plan with JP Morgan Chase Bank NA.
The IDS Center transaction is just one of the sales that have taken place in the Minneapolis area in the past 12 months. Experts are forecasting that this trend will continue.
