The SPS Tower in downtown Minneapolis has sold for $144 million to a Japanese company, further indication of the area's growing attractiveness to out-of-town investors.

SPS Tower was sold by California State Teachers Retirement System (CalSTRS) and purchased by Sumitomo Corporation of Americas, the U.S. subsidiary of Japan-based trading giant, Sumitomo Corp. The deal closed Friday and works out to about $220 per square foot.

The sale of the 31-story office skyscraper comes a year after the tower was renamed as its major tenant SPS Commerce signed a new lease and expanded its space to take up about 30 percent of the 655,000-square-foot office complex. The building is 84 percent full.

The building, located along 4th Avenue S. between 7th and 8th streets across the street from the Hennepin County Government Center, had been previously referred to as the 333 South Seventh Street building. The tower was completed in 1987 and includes a four-level, underground parking garage and about an acre of developable green space.

"This is our first real estate investment in Minneapolis and we believe the expertise we've cultivated throughout our several years within the U.S. real estate market will allow us to bring insights and improvements related to building management and tenant relationships," said Yurika Sugimoto, real estate manager in the commercial real estate unit at Sumitomo, in a statement.

The Transwestern real estate team of Jim Montez, Reed Christianson and Nick Sveen have been retained to provide leasing and Transwestern will also manage the complex.

According to sources, Stephen Livaditis, managing director at Eastdil Secured in Chicago, represented CalSTRS in the deal, which is the largest office sale in the metro so far this year. CalSTRS originally bought the building in 1999 for more than $94 million and has made improvements over the years.

The sale comes as local real estate experts report that the Twin Cities has seen a spike in investor interest as they are attracted to the higher property yields they can find in Minneapolis as opposed to more expensive cities along the coasts.

According to Cushman & Wakefield's Compass report published last month, the office sector reported an increase in transaction volume last year of 10 percent. One factor behind the sales increase has been that net rental rates for office space in downtown Minneapolis have risen between $4.50 and $6 per square foot since 2010, according to the report.

Scott Pollock, executive director of the capital markets team for Cushman & Wakefield, said SPS Tower fetching its price makes sense with its caliber of tenants and the building's desirable location.

"It was kind of built on the edge of the downtown [central business district]," Pollock said. "That location has really come into vogue much more today because of what's happened east of it in East Town and all of the development around the [stadium]."

Last year, Minneapolis saw several large office sales, including 33 South Sixth Street/City Center which sold for $320 million, Capella Tower, which sold for $255 million, and Target Plaza III, which sold for $171 million.

"While Minneapolis is not a premier office market from a national perspective, those investors that know the market tend to continue to invest and keep a presence in their portfolio," according to Colliers International's recent investment services report. "A highly educated, stable and diverse economy provides a comparatively safe market for office users and therefore investors."

Office sales are predicted to be comparable if not increase in 2019 due to several major downtown complexes that are also on the market.