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IDS Center deal looks like a wrap
The expected $277 million sale of the office tower could set a record for the price of an office property in the Twin Cities area.
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The IDS Center appears ready to pass from one Chicago owner to another.
The Inland Real Estate Group of Companies Inc., one of the nation's largest commercial real estate and finance groups, has agreed to purchase the landmark Minneapolis office tower for about $277 million, according to people with knowledge of the situation. The deal is expected to close in late August.
Representatives of the John Buck Co., which put the 51-story tower up for sale in January, were not available Thursday for comment. Inland spokesman Darryl Cater and Stephen Livaditis of Eastdil Realty's Chicago office, which is handling the sale, declined to comment.
The price is expected to set a record for a Twin Cities office property. Buck paid $225 million when it bought the IDS in December 2004, still the most paid to date in this area. That works out to about $184 per square foot.
Last year's sale of 50 South Sixth Street for about $193 million was the richest price when measured by price per square foot -- about $276. The $277 million to be paid by Inland would work out to about $215 per square foot.
Inland has about $13 billion in assets under management and more than 100 million square feet of commercial real estate space in various portfolios.
Inland is primarily involved in retail real estate and is the nation's fifth-largest shopping center owner, according to Shopping Centers Today magazine.
According to its website, Inland's retail holdings in Minnesota include 19 neighborhood shopping centers in the Twin Cities, Mankato, Hutchinson and Big Lake.
The IDS won't be Inland's first investment in the downtown Minneapolis office market. In 2004 Inland bought the American Express (now Ameriprise) operations center for $95 million.
Besides its iconic status, the IDS is considered a trophy property because it is nearly fully leased, with tenants that include the area's most well-established professional firms. Its vacancy rate is about 6 percent, compared with an average vacancy rate of about 14 percent for premier Class A office buildings in downtown Minneapolis.
Opened in 1973 and substantially renovated in the 1990s, the IDS was valued by Hennepin County for tax purposes at $167 million. That doesn't include the Marquette Hotel, which is part of the IDS complex but has a different owner and is not included in the sale.
The IDS sale is the latest in a series of deals that have sellers taking advantage of investors' willingness to pay healthy premiums for office properties.
Hines Interests is in the process of selling 225 South Sixth Street, Minneapolis' tallest office tower. LaSalle Plaza, at 800 LaSalle Av. S., and Wells Fargo Place, the tallest office tower in St. Paul, also are on the market.
Susan Feyder • 612-673-1723
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