New owners for a pair of high-profile office buildings in Hopkins

Two of the three buildings at Excelsior Crossings, a high-profile office complex on Highway 169 in Hopkins, have a new owner.

An entity associated with Atlanta-based Bridge Office paid $82.5 million for a 21-acre parcel and the buildings, according to public records.

The buildings have a combined 508,590-square-feet of space and are home to Element Fleet, Digi International and U.S. Bank's Home Mortgage Division headquarters, which fully occupies one of the buildings.

The deal comes at a time when demand for office space is still sagging, but investment in the sector is eking out modest gains in some areas.

Jeff Shaw, CEO at Bridge Commercial Real Estate, said in a statement that the location made the buildings extremely attractive despite challenging times for many office buildings.

"Excelsior Crossings is a high-quality asset that has been designed with tenant and employee productivity in mind, which will be paramount as companies consider their re-entry plans," Shaw said.

Excelsior Crossings is part of a three-building development that was completed in 2010 by Opus Corp. The building not included in the sale is occupied by Cargill.

Edward Neblett, associate at Bridge Excelsior Crossings, said that in addition to desirable amenities, the campus is in a highly desirable central location that's close to a substantial employee base and easily accessible to both inner-ring suburbs as well as downtown Minneapolis.

Not far from Excelsior Crossings, Bridge owns West End Office Park, a six-building campus with 568,027 square feet in St. Louis Park.

Neblett said leasing and prospective tenant leasing tours at those West End buildings and in other buildings along the I-394 corridor gained a little momentum towards the end of last year.

Bridge Commercial Real Estate, Bridge's Office operating company, will oversee capital improvements and management at Excelsior Crossings.

"We believe Excelsior Crossings provides a great opportunity to invest in an asset with a rare combination of quality and value in one of Minneapolis' hottest suburban markets," Neblett said. "We're confident our planned capital improvements and the property's unmatched amenities package will make Excelsior Crossings a best-in-class option for future tenants."

A report from Jones Lang LaSalle showed that, while office sales activity continues to lag behind pre-pandemic levels, the last three months of 2021 posted the second year-over-year increase in quarterly investment volume.

The office vacancy rate in the fourth quarter throughout the metro was 17.3%. It was slightly higher in downtown Minneapolis and a little lower in the suburbs.

Despite annual declines in absorption, there has been some gains in the sector, especially among "flight-to-quality" tenants including Old Republic Title, which leased 80,000-square feet at Crest Ridge Corporate Center, a Class A office property in Minnetonka that was also developed by Opus.

JLL said first quarter 2022 will be a pivotal quarter for downtown Minneapolis as U.S. Bancorp, Wells Fargo and other large companies bring some employees back to work.

Plans are already underway for employees to start moving into their offices this month at RBC Gateway, the first new multi-tenant office tower in downtown Minneapolis in 20 years.