A buyer has stepped forward to pay $164.5 million for 50 South Tenth St., a signature office building in downtown Minneapolis that hems Nicollet Mall.
The property — formerly known as Retek on the Mall — has been owned by an entity associated with Franklin Street Properties, a real estate investment trust based in Wakefield, Mass., which bought it for $127 million in 2006.
The 12-story multitenant office and retail building spans 498,000 rentable square feet of space and is 99.6 percent occupied, primarily by Target Corp. employees. The purchase does not include the Target store at 9th St. and Nicollet Mall, or an 850-stall underground parking garage owned by the city.
A May regulatory filing indicates the property has been on the market since January after Franklin Street executives began noticing that Minneapolis "was beginning to attract some broader institutional real estate investor interest." The time might be ripe to sell the property, they concluded.
The board of FSP 50 South 10th Corp. ultimately recommended that shareholders approve the sale to an unnamed buyer.
Properties along Nicollet Mall, which is slated to undergo a $50 million overhaul, has attracted several out-of-town buyers in recent years, including three major retail properties, City Center and Gaviidae Common I and II, that have changed hands. In addition, the signature IDS Center sold for $253 million to a Florida firm.
"What I hear from folks is that Minneapolis is viewed as a strong, stable market with a positive medium-term outlook," said Steve Cramer, president and CEO of the Minneapolis Downtown Council, a business group. "We're not in a boom-and-bust cycle. We went through the recession and weathered it better than most places, reaffirming our Steady Eddie reputation."
The Twin Cities office of CBRE Group Inc. was hired to market the 50 South Tenth St. property, and interest in it appeared to be strong, according to documents filed with the Securities and Exchange Commission. CBRE initially distributed information about the property, which was built in 2001, to nearly 5,000 potential purchasers and investors. Eighty-eight prospective buyers signed confidentiality agreements, and ultimately 12 toured the property.