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East Coast Firm Buys Downtown Minneapolis Office Bldg

GOVREIT Closes Deal in the Works Since January
March 6, 2018
An entity tied to Spaulding & Slye has paid Government Properties Income Trust (GOVREIT) $20 million for the Towle Building, an eight-story office in downtown Minneapolis.

The deal closed on Friday, according to the certificate of real estate value, but it has been in the works since at least January, when GOVREIT entered into an agreement to sell the property at 330 2nd Ave. S., according to the trust’s annual report for fiscal year 2017.

Spaulding & Slye, which has offices in Boston and Washington, D.C., bought the property with a $15.5 million mortgage from Indianapolis, IN-based Forethought Life Insurance Co., according to documents on file with Hennepin County. Forethought is a subsidiary of Global Atlantic Financial Group of New York City.

Neither party responded to requests for comment on Tuesday.

The Towle Building totals 241,213 square feet, according to the city of Minneapolis. It is currently 93 percent leased. The three biggest tenants are the retail consultancy BTM Global, engineering and professional services firm Idom Inc., and the City of Minneapolis. The property is less than a quarter of a mile from two light rail stops: the Government Plaza Station and the Nicollet Mall Station.

Using the total building area, the purchase price works out to almost $83 per square foot.

Spaulding & Slye paid $3 million less for it than GOVREIT did in July 2010, when it paid $23.23 million ($96 /SF), according to CoStar data.
See CoStar COMPS #1957307.

Hennepin County assessed the building at $9.94 million for taxes payable in 2018.

Spaulding & Slye is a real estate investment company that was founded in Boston in 1966. In 2006 it merged with Chicago-based real estate services and investment company JLL.

Please see CoStar COMPS #4157525 for additional information on this transaction.

Clare Kennedy, Minneapolis / St. Paul Market Reporter  CoStar Group   
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