print header

# 1 Commercial Real Estate Information Company

  • Find Properties 
  • Market Properties 
  • Analyze Properties 
Products
Commercial Real Estate News

Marquette Plaza Sold for $88.4M

KBS REIT Acquires 523,000-SF Office Bldg in Minneapolis' CBD
March 2, 2018
Newport Beach, CA-based KBS Strategic Opportunity REIT is the new owner of Marquette Plaza, a 15-story office building on the northwest side of downtown Minneapolis, known locally as the "building with a smile."

The 522,656-square-foot building occupies a 2.5-acre parcel at 250 Marquette Ave., and is best known for the curving pattern made by the glass panels on its west-facing side, which fronts on Cancer Survivors Park.

KBS paid $88.4 million in cash to the seller, FRM Associates LLC, which disclosed the sale in an SEC filing submitted on Thursday. Arthur Petrie is the registered agent behind FRM Associates, according to the Minnesota Secretary of State’s office. Petrie is a well-known developer and owner of Las Vegas-based Petrie Cos.

The deal closed on Thursday. The transaction was an off-market sale, said Shep Wainwright, senior vice president for KBS, which came together through a personal connection between the buyer and seller.

The purchase price is more than twice Marquette Plaza’s assessed value, which stood at $40.08 million for taxes payable in 2018, according to Hennepin County records. KBS paid about $169 per square foot.

Wainwright said the property was appealing on almost all counts: The building itself, the tenant mix and the location between Minneapolis core business district and its white hot North Loop neighborhood all played into KBS decision to buy.

The building is catty-corner to the Minneapolis Central Library and across Nicollet Mall from the site of the Gateway project, an ambitious redevelopment by Minneapolis-based developer United Properties.

“We think we have a great opportunity here to bring fresh capital to a great building in one of the most desirable sections of the city,” Wainwright said in an email on Friday. “We feel very good about the price relative to recent sales in the market combined with the opportunities to enhance and lease up the asset.”

KBS is planning to renovate Marquette Plaza, which was built in 1970 and served as the office of the Federal Reserve Bank of Minneapolis for 27 years. FRM Associates bought it from the Federal Reserve in 1997 for just $500,000, according to records with the city of Minneapolis. The building was last renovated in 2002.

Wainwright said KBS hopes to update the common areas of the building, add in an indoor/outdoor lounge to set off the Marquette Plaza’s “amazing lawn,” enhance the gym and perhaps bring in a best in class coffee shop operator.

The building was 70 percent leased at the time of the sale, according to the filing. Major tenants include the U.S. Food and Drug Administration, law firm Foley & Mansfield, and The Scoular Co., a commodities trading and transportation company.

KBS is bringing in a new management and leasing team. It has tapped the Minneapolis office of Los Angeles-based CBRE for the job, according to a news release put out by the brokerage. Brokers Mark McCary, Larissa Champeau, Ann Rinde and Paddy Clancy will be charged with marketing the building, while Dan O’Neill will oversee day-to-day management of the property.

Petrie could not be reached for comment on Friday.

KBS also owns the Northland Center office building in Bloomington, MN and RBC Plaza, a 40-story office tower in downtown Minneapolis, which is home to multiple tenants including CoStar Group.

Both parties handled the direct sale in-house.

Please refer to CoStar COMPS #4152069 for additional information on the latest transaction.

Marquette Plaza is the second major office building to trade hands in downtown Minneapolis. Last week, San Francisco-based Shorenstein bought the 58-story Capella Tower at 225 S. Sixth St. from ASB Real Estate Investments. The sale included an adjoining 20-story building occupied by the Star Tribune newspaper.

The two structures cover 1.4 million square feet, which works out to about $182 per square foot.

The office tower’s illuminated crown has graced the city’s skyline since construction on the building wrapped up in the early 1990s. Its namesake, Capella University, occupies about 348,000 square feet and has had naming rights to the structure since 2008.



Clare Kennedy, Minneapolis / St. Paul Market Reporter  CoStar Group   
GET IN TOUCH        Contact CoStar News Team:   News@CoStar.com

 Find us on 

Welcome To CoStar's
Industry-Focused,
Award-Winning News

Winner of three Journalism Awards from the National Association of Real Estate Editors (NAREE)

Award-Winning News