MINNEAPOLIS—For several years, investors have been jumping at the chance to own office property in the Minneapolis CBD, attracted by its remarkably strong economy and workforce. Chicago-based Golub & Co. and Oaktree Capital Group LLC just became the latest group to make a major downtown purchase by acquiring RSM Plaza, a 415,000 square foot office tower and 850-stall parking ramp at 8th St. and Nicollet Ave. Golub purchased the building for an undisclosed price from United Properties in a transaction that represents the largest company-owned asset that United Properties has sold in its nearly 100-year history.
Golub vice president Adam Short led the acquisition team and tells GlobeSt.com that in addition to the impressive economy, "there is a lot of liquidity in the market today, and hopefully, in the future as well." Any possible sale is still being evaluated, but the building is right in the Golub wheelhouse, in that it's a class B building that is well-occupied, well-located, but still has some room for improvement.
"We typically look for properties that we can add value to," Short says. Golub and its partners will conduct a $10-million renovation, which Short expects they will complete in mid-2017. "If we do decide to sell, we strongly believe that there will be many interested buyers."
"It has been challenging to find the right downtown property," he adds. Golub has been involved in the Twin Cities for many years, but up until now, it has purchased buildings in suburbs such as St. Louis Park and Bloomington. But RSM Plaza sits right at the CBD's 'Main and Main' location next to Nicollet Mall, one of the region's premier shopping destinations. Tenants in RSM Plaza include RSM (formerly McGladrey), Amec Foster Wheeler, Unilever, the Clorox Co., Abbott Nutrition, Portico Benefits, First American Title Insurance Co., Panera Bread, and Barnes & Noble, among others.
The renovation will include improvements to the building common areas as well as the addition of modern amenities such as a fitness center, conference center, tenant lounge and improvements to the parking garage and retail areas.
"RSM Plaza has been an important investment asset for us for two decades," says John Saunders, senior vice president, United Properties, who managed the sale. "The sale is part of our strategy to redeploy assets toward recent development projects."
United Properties' chief executive officer Frank Dutke handled the December 1994 purchase – when it was known as Midwest Plaza – from lender Goldman Sachs, which had repossessed the property in the late 1980s during the savings and loan crisis. United Properties then carried out a major renovation and upgrade to the building, common areas and systems.
Broker Scott Pollock of Cushman & Wakefield/NorthMarq represented United Properties in the building sale.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
