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MINNEAPOLIS — Inland American Real Estate Trust Inc. has sold the 57-story IDS Center, an iconic skyscraper in Minneapolis, for $253 million. A joint venture between Beacon Investment Properties LLC, Tel Aviv-based Harel Insurance Investments & Financial Services Ltd. and Menora Mivtahim Insurance Ltd. acquired Minnesota’s tallest building.
The tower, located at 80 S. 8th St., occupies an entire block of the Nicollet Mall in what is considered the center of downtown Minneapolis. The 1.4 million-square-foot property includes a 25,000-square-foot indoor park and fountain, and a two-story retail plaza known as Crystal Court, which is fully leased. Retail tenants include Banana Republic and Gap.
The tower was originally built as the corporate headquarters for American Express-owned Investors Diversified Services, which is now independent and known as Ameriprise. The office portion of IDS Center is 93 percent occupied. Tenants include the law firms of Lindquist & Vennum; Merchant & Gould; Briggs and Morgan; the Minneapolis office of New York City-based Fulbright & Jaworski; and Gray, Plant, Mooty, Moot & Bennett.
Four glass-enclosed pedestrian walkways connect IDS Center to surrounding buildings and retailers such as Macy’s and Off Saks department stores.
“It is a stable asset with long-term tenants and a history of strong financial performance. We are honored to assume the stewardship of IDS Center from Inland American, which took very good care of this commercial real estate icon during its seven-year ownership. We will carry on that tradition,” says Ariel Bentata, chief investment officer and founding partner of Beacon Investment Properties.
Bentata added that the company looks for “value creation opportunities.” Beacon plans to add a conference center and fitness center to the building, in addition to completing upgrades to the Crystal Court during the next few months.
Inland American Real Estate Trust, a non-traded REIT, which had owned IDS Center since 2006, said it sold the office complex to focus its investment portfolio on the lodging, retail and student housing sectors.
Susan Hill and Kelly Layne with HFF’s Houston office, along with Timothy Joyce of HFF’s Chicago office, secured the 10-year, $182 million acquisition financing through JP Morgan Chase Bank.
The transaction is Hallandale Beach, Fla.-based Beacon’s largest acquisition to date. The 10-year-old commercial real estate investment manager and operator focuses on acquiring Class A and B assets in prime locations across the nation. Beacon also has offices in Houston, Dallas and Atlanta.
Harel Insurance Investments & Financial Services is Israel’s second largest insurance group. The company provides financial and insurance solutions including provident funds, pension funds and investment portfolio management.
Menora Mivtachim Group specializes in managing financial assets and pensions, as well as providing a variety of insurance solutions. The group manages assets valued at approximately $26 billion.
— Brittany Biddy