The Cray Plaza office tower in downtown St. Paul near Mears Park has been sold and will be converted into apartments by Bigos Management, which already owns the two connected Galtier apartment towers.
The sale would mean the troubled Lowertown office building, which had been in receivership, will finally get some investment dollars for improvements. The seven-story building has noticeably fallen into disrepair and has sat more than half empty since Cray Inc. moved to Bloomington in 2017.
Finding a new buyer for the office portion of the massive building was perceived as good news by city officials, planners and real estate experts. Some lamented the history of the project, which periodically struggled since the 1980s when the St. Paul Port Authority invested heavily in the structure, only to see various owners default on loans or run into other difficulties.
"This is great news for St. Paul," said Joe Spartz, president of the Greater St. Paul Building Owners and Managers Association, in an e-mail. "Bigos Management is a highly regarded ownership group so it's good to see they are prepared to make another significant investment in downtown."
Bentley Smith, a broker with CBRE Minneapolis, which helped represent receiver Trident Pacific Real Estate Group Inc. in the sale, also said Bigos is a good fit.
Bigos is "far and away" the logical buyer, since owner Ted Bigos has numerous units in downtown St. Paul, Smith said.
"Bigos has the creativity and the vision to completely repurpose the property," he said. "This is a really great location on Mears Park right in the thick of one of the most popular areas in St. Paul with a strong presence of multifamily. It [was] just going to take somebody with the right vision to repurpose the property and put the right use in there."
Besides the office conversion, Bigos plans to make maintenance repairs in the building, Smith said. The building's glass ceiling that covers the large atrium has been leaking, and there are other improvements that are needed, he said.
The sale includes about 415 stalls of the parking garage accessible from E. 5th Street, but not the connected condo complexes.
The ramp in total has 829 parking spaces. About 140 serve the condos, and the rest are already owned by Bigos for the Galtier Towers apartments.
Smith declined to disclose the sale price and an electronic certificate of sale wasn't immediately available Tuesday.
In a statement, Bigos — which is purchasing the property as entity Bigos-Galtier LLC — confirmed that it would convert much of Cray Plaza into apartments to add to the already existing 366 units at Galtier Towers. Construction is scheduled to begin in 2021. Plans are still being finalized and not a lot of other details were immediately available.
"Bigos Management is excited to be expanding our St. Paul portfolio," said David Keinert, director of marketing with Bigos Management, in a statement. "As the largest operator of apartments in downtown St. Paul, our team is excited and honored to be re-imagining this building that has graced the downtown landscape for decades."
After Cray Inc. left, the building continued to have issues. Cray Plaza went into foreclosure with Wells Fargo Bank reclaiming the building from previous owner National Exchange Advisors of Encino, Calif. Trident Pacific Real Estate Group, which operates as a national receivership resolutions firm, was appointed as a receiver.
According to a recent report by the Greater St. Paul Building Owners and Managers Association, more than 148,000 square feet of space — or more than 67% — is available in Cray Plaza. The building, which is located at 195 E. 5th St., was constructed in 1985.
Smith, Ryan Watts, Sonja Dusil, Judd Welliver and Tom Holtz of CBRE Minneapolis represented Trident Pacific Real Estate Group Inc., which is based in Newport Beach, Calif., in the transaction.