United Properties sold RSM Plaza, one of Minneapolis' most centrally located skyscrapers, to a real estate investment firm from Chicago.
Golub & Co. purchased the 20-story tower at 801 Nicollet Mall for $78.3 million.
The building was long known as McGladrey Plaza until just a few weeks ago when the property's largest tenant, the accounting firm McGladrey LLP, changed its name to RSM.
Bloomington-based United Properties, a Pohlad family company, has owned the nearly 416,000-square-foot building for 21 years. The transaction, which closed Friday, marks the largest company-owned asset sold by the company in its nearly 100-year history.
United is selling the property to free up cash for its existing development projects, said John Saunders, senior vice president for United Properties.
The company has had a busy year developing industrial real estate and senior-living housing, particularly in Denver and the Twin Cities.
It is currently negotiating a term sheet with the city of Minneapolis to purchase the Nicollet Hotel Block next to the Minneapolis Public Library, where it plans to build a more than 30-story tower and public plaza.
United is also working to gain approval for another new office building adjacent to Target Field. It is considering a 15-story commercial building next to Normandale Lake Office Park in Bloomington.
"We've owned it so long, and it has been a tremendous asset for us," Saunders said. "Our CEO led the purchase of the building in 1994, so when you are invested in a project that long, it is bittersweet to sell it."
Golub has owned a few suburban Twin Cities office properties in recent years, but this is its first downtown building.
Coincidentally, the company sold Park Place East & West in St. Louis Park two weeks ago.
Golub specializes in well-located properties that have "a perceived upside whether through more efficient leasing or updates," said Adam Short, vice president at Golub. "We've been looking [in downtown Minneapolis] for a while and finally found the one that fit our profile."
The buyer plans to spend $10 million renovating the building, a process to be completed midyear 2017. Golub plans to update common areas and retail spaces, as well as add a fitness center, conference center and tenant lounge.
RSM Plaza is 96 percent leased, Saunders said.
Cushman & Wakefield/NorthMarq, also a Pohlad family company, marketed the property, which is composed of seven parcels, according to Hennepin County records. The building was first constructed in 1969.
In addition to RSM, the building's tenants include Unilever, the Clorox Company, Abbott Nutrition, Portico Benefits, First American Title Insurance Company, Amec Foster Wheeler, Panera Bread and Barnes & Noble.
United Properties bought the property from Goldman Sachs in December 1994 when it was called Midwest Plaza. Goldman had repossessed the building in the late '80s during the savings and loan crisis.
Scott Pollock, a broker with Cushman & Wakefield/NorthMarq, represented United Properties in the building sale.
Short handled the acquisition side.