While many downtown office markets across the country are still struggling in the wake of the pandemic, an office deal has given Minneapolis a boost.
In its first investment in the Twin Cities, Pioneer Acquisitions, with offices in New York and Chicago, purchased two office towers in downtown Minneapolis, along with an adjacent parking garage.
The acquisition and plans for upgrades signal investment conviction in repositioning the towers ahead of an expected return in demand for downtown office space. As a result, the deal was selected by a panel of local industry professionals as the winner of the CoStar Impact Award for the sale/acquisition of the year for Minneapolis.
"Continued investment in Minneapolis is vitally important to both Minneapolis and the State of Minnesota," said James Rock, senior vice president of Colliers' Retail Services Group, and one of the judges. "This sale demonstrates ongoing investment into critical office infrastructure."
The purchase includes 100 Washington Ave. and 111 Washington Ave., totaling about 913,000 square feet, along with the adjacent 870‑stall parking ramp near Hennepin Avenue and the intersection of downtown and the North Loop.
The Gateway District towers were 74% and 55% occupied at the time of the sale. The buyer's plans call for enhancing the ground‑level terrace and other upgrades to position the complex to compete for modern office users.
The deal marks a strategic expansion from multifamily into office property for Pioneer Acquisitions, and the judges said it's a sign of confidence in the long‑term viability of the Minneapolis central business district.
About the property: The sale for just under $49 million included the parking ramp, which alone is assessed at $7.09 million and adds value in an area with limited parking. The office towers carry a combined assessed value of $59.68 million. Pioneer plans to refresh and modernize existing amenity areas, including the tenant lounge and ground-level terrace at 100 Washington.
Pioneer Acquisitions tapped Cushman & Wakefield to lease and manage 100 and 111 Washington Square.
What the judges said: The project reflects "vitality in the form of new ownership in the market, and overcame several challenges, including pulling together debt and equity to purchase an office asset in the current office market," said Andrew Babula, director of the real estate program, University of St. Thomas, Opus College of Business. He added that the sale "injects needed capital into a challenging market."
"This was a big deal for a first-time buyer in Minneapolis," said Pete Guidera, managing director, CB-Commercial Coalition Group, Coldwell Banker Commercial Realty.
Brent Karkula, managing director, JLL, added that the "size of the transaction" was a key reason for its selection. "It's always good to see new investors entering the Minneapolis market. Bringing in a new stable ownership group with a long-term commitment to Minneapolis is a huge step in the right direction," Karkula added.
They made it happen: Ryan Watts executive vice president, and Harrison Wagenseil, senior vice president of CBRE represented the seller, Shorenstein Properties. James Peterson, principal and co-founder of Pioneer Acquisitions, negotiated on behalf of the buyer.
CoStar Research Manager Alyssa Ricca contributed to this report.