One of downtown Minneapolis' tallest office towers, the Wells Fargo Center downtown, is being sold for $315 million, according to a source with direct knowledge of the deal.
The 57-story office tower, located at 90 S. 7th St. in the heart of the downtown commercial district, is being purchased by the Connecticut-based Starwood Capital Group, according to the source.
Starwood Capital, which is best known for creating Starwood Hotels & Resorts in the mid-1990s, is paying one of highest prices ever for a Minneapolis tower and plans to renovate the office complex and add amenities. Starwood Capital didn't respond to requests for comment Monday.
The seller is a partnership that includes global investment firm Blackstone and real estate company Hines, the manager of the property. A Hines representative at Wells Fargo Center declined to comment when asked about the sale. Blackstone didn't return a request for comment.
The Wells Fargo Center, which dominates the Minneapolis skyline along with the IDS and Capella towers, was designed by famed architect Cesar Pelli and completed in 1987 as Norwest Center.
Its tenants include Wells Fargo, which has a bank branch in the building, investment firm Castlelake L.P., accounting company KPMG, law office Faegre Baker Daniels, and others. The building is 80 percent leased.
The Wells Fargo Center sale is just $5 million shy of the market's biggest office tower price tag, the $320 million that Samsung Life Insurance paid last summer for 33 South Sixth, also known as City Center.
The seller was represented by the Eastdil Secured team of Stephen Livaditis and Ken Glomb, the same team that recently represented building owners in the recent sales of SPS Tower, City Center, Capella Tower, T3, and the 9320 Excelsior Boulevard office building in Hopkins.
The purchase price breaks down to about $263 per square foot.
The Twin Cities saw a 10 percent increase in the combined value of office building sales in 2018 compared with the previous year as capital flowed in from sources new to the market, according to Cushman & Wakefield's Compass report.
Commercial real estate analysts point to several factors for the growth, including the rising rents and a relatively low unemployment rate, which has prompted employers to seek out attractive offices to remain competitive for talent.
Office sales could increase this year even compared to last year's volume. Another recently renovated downtown office complex on the market is Washington Square, a three-building office campus on the edge of the central business district that includes 1.1 million square feet of combined space.