Two downtown Minneapolis office buildings sell for nearly $170 million

Two downtown Minneapolis office buildings located around the corner from each other sold this week for a total of nearly $170 million.

The 510 Marquette building, near the intersection of 5th Street and Marquette Avenue, sold for $61 million, according to an electronic certificate of real estate value made available Friday.

Xcel Energy's corporate headquarters at 4th Street and Nicollet Mall sold for more than $108 million, according to an electronic certificate of real estate value also available Friday.

The Xcel Energy headquarters sale is one of the top office sales in the city this year with a price paid per square foot of about $514.

The Opus Group developed the nearly 212,000-square-foot building for the utility company in 2016. The nine-story building at 401 Nicollet Mall features open offices, movable walls, an executive parking garage and bike storage along with collaborative spaces and conference rooms. CBRE's Ryan Watts, Sonja Dusil, Tom Holtz, Judd Welliver and Bentley Smith represented the Opus Group in the sale.

"This property is one of the most innovative and interesting corporate offices in the Twin Cities," Watts said in a statement. "The office was originally designed with employee collaboration in mind, as most of the floors utilize open space architecture that encourages teamwork among Xcel Energy's 800 employees that reside in the building. It's amazing how this property was transformed from a parking ramp into a model office that is adapted to serve both current and future workforces."

The buyer of the building is an entity associated with Sentinel Real Estate Corp., a New York City-based real estate investment management firm. Sentinel didn't respond to a request for comment Friday.

Xcel Energy, which has a long-term lease, will remain a tenant in the building. The company completed its first headquarters at 414 Nicollet in 1965. In 2016, Xcel Energy expanded its headquarters to include the 401 Nicollet building.

The 13-story 510 Marquette building was sold by San Francisco-based real estate investment company Spear Street Capital to an entity called IPERS 510 Marquette Inc. The 510 Marquette building sale comes to about $258 per square foot.

The building was constructed in 1921 as a branch of the Federal Reserve Bank.

Office sales in the Twin Cities have been on the rise. Last year saw record Twin Cities office sales with transactions totaling more than $1.8 billion, according to real estate company JLL.

This year, large office-building sales in downtown Minneapolis have included the SPS Tower ($144 million), the Wells Fargo Center ($314 million) and the Campbell Mithun Tower, which is now called the Two22 ($81 million).

Nicole Norfleet • 612-673-4495 Twitter: @nicolenorfleet