One of downtown Minneapolis' most-famous skyscrapers is for sale.
The IDS Center on Nicollet Mall is being marketed at a time when at least two other skyscrapers in the city's central business district are on the block.
They include Capella Tower at 225 S. 6th St., known as the building with the distinctive cap, and 33 S. 6th St., which includes City Center and an adjacent building once known as the International Multifoods Tower.
But of them all, the 57-story IDS is perhaps the best known. It towered over the Foshay Tower as the tallest skyscraper in Minnesota when it opened in 1972, the brainchild of star architect Philip Johnson.
On Thursday, Chicago-based HFF Inc. said it was marketing the building on behalf of the building's owner, Inland American Real Estate Trust Inc.
The postmodern skyscraper is home to several blue-chip law firms, five banks, Globe University, the Marquette Hotel, retailers, including Gap and Banana Republic, and restaurants such as Basil's, Mission and Cosi.
"The IDS Center is an iconic asset totaling more than 2 million square feet and is the centerpiece of downtown Minneapolis," said Jeff Manno, vice president of acquisitions for Inland American, in a statement. "The decision to market this asset for sale is consistent with the execution of our long-term strategy to reposition the portfolio and focus on retail, student housing and lodging investments."
Inland bought IDS Center in 2006 for almost $278 million. Area commercial real estate experts said it's unlikely the building will now fetch a similar price.
A veteran broker extensive knowledge of the Twin Cities market said the 40-year-old property also has some maintenance issues, like a lack of sprinklers in some areas, that might require a significant investment by a new owner. He also said several tenants are due to have their leases renegotiated in the next couple of years, a situation that could increase a new owner's risk.
"A lot of capital might need to invested in improvements in order to keep those tenants," he said. Those challenges could make it difficult for Inland to sell the building for a premium, he said.
However, HFF senior managing director Jeffrey Bramson said in a statement, "the stability of the Minneapolis market, the property's high occupancy rate and the historically low interest rate environment" provides an "opportune time to be able to drive value on this asset."
Inland American, which acquires and develops commercial real estate projects, had an interest in about 970 retail, industrial and office properties nationwide as of March 31.
Janet Moore • 612-673-7752