The owner of the Northstar Center in downtown Minneapolis is seeking investors to convert part of the aged office property into a 266-unit apartment tower.
An affiliate of Triple Net Properties, based in California, hired BKV Architects to draw up a vision for the 313,000 square-foot east building of the three-building Northstar complex. It hired the Minneapolis-St. Paul office of Colliers International to market the plan to developers.
“Sometimes not everyone has the vision,” said Julie Lux, a senior associate with the multifamily group at Colliers in Minneapolis. “The seller has positioned this with the initial floor plans so buyers can imagine the conversion.”
It’s part of a larger trend of transitioning older, dated office buildings — which the industry dubs “obsolete” — into dwelling units in an attempt to restore a building’s value.
Northstar Center is three units that are connected on most levels: Northstar West, Crowne Plaza Northstar Hotel and Northstar East, which is the property at 608 2nd Av. S. that’s up for conversion.
The block boasts the oldest skyway connection still in use today, spanning 7th Street S., and the Six Quebec condos, which are some of the most expensive for-sale condominium units in Minneapolis.
Wells Fargo & Co. is one of the largest tenants in Northstar. It will soon vacate the property by relocating many of its downtown employees to its new, two-building complex that’s near completion by U.S. Bank Stadium. Lux said that Wells Fargo move and several pending lease expirations converged to make the timing right.
“They are effectively going to be able to deliver a blank building [to a buyer-developer] because the bulk of the leases are expiring,” Lux said.
Northstar East was built in 1917, with the neighboring two structures added in 1963. Pedestrians walking the skyway system know the building for the odd passageway between East and West that drops people through a ground-level food court before connecting to the next building. Plans show a complete remodeling of the food court as well.
The seller hired Hess Roise & Co., a consultancy firm specializing in historic tax credits, to help maximize the property. The firm has submitted a nomination with the National Register of Historic Places so that a buyer will be in the position to use historic tax credits for the conversion. “That’s a really valuable tool for developers,” Lux said.
Colliers will be releasing a call for offers by the end of April or early May and hopes to have a closing by the end of this year.