A national real estate investment trust will pay $126.5 million for RBC Plaza in downtown Minneapolis, the firm said in a regulatory filing.
KBS Real Estate Investment Trust will buy 609,368 rentable square feet of office space and 68,677 rentable square feet of retail space in the deal.
The seller is Brookfield Properties, long a major player in Twin Cities commercial real estate. In 2009, the firm announced it was selling its holdings in Minneapolis, including RBC Plaza and Gaviidae I and II, where Neiman Marcus was a tenant until Saturday.
RBC Plaza was built in 1991. As of Jan. 1, it was 83 percent leased to 34 tenants who pay a total of about $8.6 million in rent annually.
KBS released terms of the deal in a Jan. 24 filing with the Securities and Exchange Commission. It also said it would convert about 32,000 square feet from retail to office space.
It is the latest in a string of developments at downtown properties, but this one is a good sign for Minneapolis, said Mark Kolsrud, a principal at commercial real estate services firm Cassidy Turley. KBS is what Kolsrud calls a "core buyer," meaning the firm only buys the best buildings in the best locations in the best cities, typically on the coasts.
"Occasionally they'll come to Minneapolis and buy a Class A asset," Kolsrud said. "KBS is a great owner."
The Saturday departure of Neiman Marcus left a void in what is already a challenged retail environment at the core of Minneapolis. The Dallas-based luxury department store chain -- which rarely shutters stores -- said it would close its sole Minnesota outlet after operating at Gaviidae for more than 21 years.
