Newport Beach, CA-based KBS Real Estate Investment Trust III has acquired RBC Plaza in downtown Minneapolis, MN for $118.1 million, or about $175 per square foot, net of closing credits. The full contract price for the sale was reported at $126.5 million.
Located at 60 S. 6th St., the 40-story, trophy-class office tower was built in 1991 in the CBD's financial district along Nicollet Mall. The property contains 609,368 square feet of office space and 68,677 square feet of retail and amenity space above underground parking. The first four floors make up the retail component, a.k.a. Graviidae Commons at 555 Nicollet Mall, which is attached to an adjacent, multi-building retail complex spanning two city blocks via skywalk connections.
At time of sale, the tower was 83 percent occupied, including office occupancy of 92.4 percent and retail space at 62.6-percent occupancy. KBS REIT III plans to reconfigure some of the existing retail space following the pending closing of one of the anchors there. Neiman Marcus has announced their retail store at this location would shutter by July 2013.
Initial plans for the $26.6 million in renovations call for the addition of creative office space on the lower levels and a grand entrance off of Nicollet Mall, according to the buyer, which may also incorporate stronger office amenities like conference rooms, a fitness facility, and lobby renovations to the tune of approximately $3 million.
"This transaction illustrates KBS REIT III’s ability to utilize its various areas of expertise to take advantage of an exceptional investment opportunity in a top performing market," said Giovanni Cordoves, vice president of asset management of KBS Capital Advisors, the REIT’s advisor who will oversee management of this property. "The property’s footprint on Nicollet Mall and its proximity to Light Rail Transit the Minneapolis-Saint Paul International Airport makes it a desirable place for companies to do business."
Tom O'Brien and Terry Kingston with Cushman & Wakefield / NorthMarq, along with Mike Winn and Tim Richey with Cushman & Wakefield / Denver, represented the seller, Brookfield Office Properties. KBS Realty Advisors handled the acquisition in-house.
The firm has retained Cushman & Wakefield / NorthMarq to exclusively handle the property starting Feb. 1, with Sonja Dusil leading leasing efforts and Theresa Elveru leading the property management team.
Please refer to CoStar COMPS #2665818 for more information on this transaction.
CoStar Group Research Associate Christopher Allison contributed to this report.