Public non-traded real estate investment trust KBS Real Estate Investment Trust III has acquired RBC Plaza, a 678,045-square-foot mixed-use office building in downtown Minneapolis, for a purchase price (net of closing credits) of USD118.1m.
At closing, the trophy-quality tower was 83 per cent occupied. KBS Reit III plans to reconfigure some of the existing retail space.
RBC Plaza is a 40-story building that contains 609,368 square feet of office space and 68,677 square feet of retail and amenity space above an underground parking structure. The building is strategically located in Minneapolis' financial district along Nicollet Mall, downtown's most popular and well-known shopping district. The first four floors of RBC Plaza make up the retail component and, via skywalk connections, are part of a multi-building retail complex that spans two city blocks.
"Brookfield, the seller, has done a wonderful job of running the asset, however the pending closing of one of the anchor retailers provides an exciting opportunity to rethink the four-story retail section of this project," says Rodney Richerson, KBS regional president. "We believe we have a great opportunity to convert some says the upper-level retail floors into creative office space, along with creating a primary entrance off of Nicollet Mall and improving the overall retail mix. In addition to these improvements, we anticipate adding stronger office amenities, conference rooms, a fitness facility and some lobby renovations that will cost approximately USD3m."
Brookfield Office Properties was represented by Tom O'Brian and Terry Kingston with Cushman & Wakefield/NorthMarq and Mike Winn and Tim Richey with Cushman & Wakefield/Denver.
"This transaction illustrates KBS Reit III's ability to utilize its various areas of expertise to take advantage of an exceptional investment opportunity in a top performing market," says Giovanni Cordoves, vice president of asset management of KBS Capital Advisors, the Reit's adviser who will oversee management of this property. "The property's footprint on Nicollet Mall and its proximity to Light Rail Transit the Minneapolis-Saint Paul International Airport makes it a desirable place for companies to do business."
KBS has hired Cushman & Wakefield/NorthMarq to manage and lease the asset effective, 1 February 2013. Sonja Dusil will lead the leasing efforts and Theresa Elveru will lead the property management team.