A prominent downtown office tower that had been put up for sale in June is off the market as a result of the unsteady economy and troubled capital markets.
The building known as 225 South Sixth -- and about to be renamed Capella Tower -- was recently pulled off the market, according to Bob Pfefferle, a project manager in the Minneapolis office of Hines Interests. Houston-based Hines manages the tower and owned it until 2006, when it sold the property to ASB Capital Management of Washington for $245 million in one the Twin Cities' largest office building transactions.
The property, made up of a 56-story tower and an adjoining 20-story building, has boosted occupancy in the past year to about 85 percent. Plans were announced this year to rename the property as part of an expanded and extended lease agreement with Capella Education Co., its largest tenant.
"The debt and equity markets are in turmoil, and that means larger transactions are having a difficult time getting done," Pfefferle said in a phone message.
For most of the year the tight credit market has made it difficult to finance property deals of all types, and sellers have had to accept more modest offers. The result has been a decline in the dollar value and number of deals here and nationwide.
The building on S. 6th Street, known for the distinctive halo on its roof, is among the most prominent on the Minneapolis skyline. In addition to Capella, tenants include IBM, Morgan Stanley and the law firm of Winthrop & Weinstine. Originally called First Bank Place, it was completed in 1992.
Susan Feyder • 612-673-1723
