Wells Fargo Center in downtown Minneapolis, the city’s third-tallest building, has been sold to a trio of investor groups, one of which is locally based.
Downtown Minneapolis’ Wells Fargo Center sells to trio of investor groups
Minneapolis-based Onward Investors partnered with two other firms to purchase the city’s third-tallest building. The sales price was not immediately available.
The Minnesota Star Tribune
December 13, 2024 at 3:42AM
Minneapolis-based Onward Investors, an investment firm that focuses on real estate opportunities, announced Thursday night that it had partnered with Cross Ocean Partners and Neuberger Berman to acquire the 57-story tower at 90 S. 7th St.
The price of the building was not disclosed.
Wells Fargo Center, known for its Art Deco style, was designed by renowned architect César Pelli. It opened in 1987 as the headquarters of Norwest Corp., five years after a fire destroyed the banking institution’s former home. Norwest eventually merged with Wells Fargo.
“This acquisition epitomizes our fundamental value investment strategy of opportunistically capitalizing upon market dislocation and demonstrates Onward Investors’ continued commitment to playing an active role in Minneapolis’ revitalization,” Jon Lanners,a partner at Onward Investors, said in a news release.
Wells Fargo Center sold for $315 million in 2019 to Miami-based Starwood Capital Group. At the start of this year, city assessors valued the building at $173 million, a 23% drop from the year before — and a sign of the struggles facing office buildings in the wake of the COVID-19 pandemic and rise of remote work.
Wells Fargo Center is currently 62% leased, with up to 110,000 square feet of contiguous available space. Since 1988, the 1.15 million-square-foot building’s occupancy has averaged 95%, making it one of Minneapolis’ most desirable office buildings.
According to the release, Starwood Capital Group made “considerable renovations,” and the new owners plan to “continue to strategically invest in the property.”
“Pairing state-of-the-art amenities with timeless design, the Wells Fargo Center is well-positioned to attract tenants seeking a premier building in a dynamic urban environment,” the release said.
The overall office vacancy rate for downtown Minneapolis at the end of the third quarter was 23.4%, up a percentage point from the same quarter a year ago, according to brokerage firm Colliers.
Current vacancies, which are far higher than before the pandemic, are forcing some building owners to sell at significantly discounted prices. In September, a pair of office towers known as the Forum sold for $6.5 million, representing a discount of more than 90% discount from 2019 when the towers sold for nearly $74 million.
Minneapolis-based Onward Investors partnered with two other firms to purchase the city’s third-tallest building. The sales price was not immediately available.
