business

The brokerage arm of Minnetonka-based Welsh Companies has been hired to lease one of downtown Minneapolis' largest office properties.

The Minneapolis office of Hines Interests said last week it has retained NAI Welsh to lease 100 and 111 Washington Av. S. The two buildings are part of the three-building Washington Square complex and parking ramp that Houston-based Hines and the California Public Employees' Retirement System bought last year for $124 million, according to figures compiled by Bloomington-based NorthMarq.

The third building at 20 Washington Av. S. is fully occupied by ING North America Insurance Corp., the former owner of the nearly 1-million-square-foot office complex.

Hines said the other two buildings are 67 percent occupied. That's considerably less than the 82 percent average occupancy rate for downtown office buildings as of the third quarter, according to the figures from the Twin Cities office of Colliers Turley Martin Tucker.

Current tenants include Wells Fargo and the law firm of Lockridge Grindal Nauen and Hines, which has a property management office at the 100 Washington building.

The new owners began upgrading the properties several months ago, with the most notable improvement a restoration of the reflecting pools at 20 Washington.

After looking at several other downtown Minneapolis locations, Augsburg Fortress has decided to stay put. Augsburg, the publishing house of the Evangelical Lutheran Church in America, recently renewed its headquarters lease at Fifth Street Towers. The Twin Cities office of CB Richard Ellis represented Augsburg in the lease negotiations.

The publisher has been in the office building at 100 S. 5th St. since 1997 and will occupy 36,500 square feet under its new, five-year lease. The 436,500-square-foot building was 13 percent vacant as of midyear, according to NorthMarq.

CBRE owned the property, made up of two buildings at 100 and 150 S. 5th, until 2007 when it sold the complex to a London-based real estate firm.

Tight credit continues to challenge the commercial real estate market, but some deals are managing to get done. Welsh Capital recently announced closing of two commercial real estate loans: a $4.5 million refinance of Granite Ridge, a 91-unit apartment building in Brooklyn Park, and $1.2 million in acquisition financing for a 45,072-square-foot multi-tenant industrial building in Edina.

Granite Ridge was financed through Fannie Mae while the industrial property was financed by a local commercial bank. Both are fixed-rate, non-recourse loans secured by collateral where the borrower is not personally liable.

The loans put Welsh Capital's transaction volume at more than $451 million.

Susan Feyder • 612-673-1723