A late-season rush to buy Twin Cities office towers

In the past month, at least four local office towers have been sold in transactions totaling about $184 million, according to records filed in Hennepin County.

The deals seem to bolster the findings of a third-quarter research report issued by Cassidy Turley, a commercial real estate services provider, that indicates the market for office space in the Twin Cities "is continuing its long march toward a return to prerecession levels."

Details became public Thursday on one of the biggest transactions in the past month; it involves two office buildings in St. Louis Park near the upscale Shops at West End. The 1550 and 1600 Towers in the near-western suburb along Interstate 394 were sold to a division of the Blackstone Group of New York for $71 million.

The transaction was part of a larger $1 billion deal announced Dec. 9 by the former owner of the properties, Indianapolis-based Duke Realty Corp., to Blackstone. The portfolio included a sell-off of 79 buildings spanning about 10 million square feet of high-quality "Class A" suburban office buildings in seven cities nationwide.

New York-based Blackstone is a global investment and advisory behemoth that owns properties worldwide, including the Waldorf-Astoria hotel in New York City and the Trianon Palace Versailles in France, plus the Hilton hotel chain.

Cassidy Turley said this month that its Minneapolis office was selected to manage the St. Louis Park properties. The 1550 building (known as the MoneyGram Tower) and 1600 tower were built in 1987 and 2000, respectively, by Duke Realty.

Another prominent office tower along the busy Interstate 494 strip in Bloomington was sold to a Canadian real estate investment trust for about $61 million, according to records filed in Hennepin County.

The 240,000-square-foot building, at 4400 W. 78th St., is home to Rasmussen College and the Minneapolis office of CBRE Group Inc., the Los Angeles-based commercial real estate services firm, among other tenants.

The sale was finalized on Dec. 22.

Artis invests in office, industrial and retail properties, particularly in western Canada, according to the company's website. The company's commercial property portfolio comprises nearly 17 million square feet of leasable space at 162 properties in Canada and the United States.

This is the third large office deal that has been completed in the past month. The Colonnade office tower and adjacent land in Golden Valley were sold to a New York firm for $52 million.

The Twin Cities' office market experienced 242,368 square feet of overall absorption -- the rate at which rentable space is filled -- in the third quarter, according to Cassidy Turley. The vacancy rate was 17 percent at the close of the third quarter, 3.2 percent lower than a year ago.