KBS REIT II Pays $54.4 Million for Office Tower in Suburban Minneapolis

KBS REIT II Pays $54.4 Million for Office Tower in Suburban Minneapolis

KBS Real Estate Investment Trust II (KBS REIT II) has acquired 601 Tower at Carlson Center, a 15-story office tower in Minnetonka, Minn., for $54.4 million plus closing costs, according to a filing with the Securities and Exchange Commission.

The 288,458 sq. ft. asset is located on approximately 2.3 acres of land within the Carlson Center master-planned office park at the interchange of I-494 and I-394. A CB Richard Ellis investment team led by local broker Tom Holtz represented the seller, New York-based TIAA-CREF (Teachers Insurance and Annuity Association-College Retirement Equities Fund). The transaction closed Feb. 3.

At the time of the sale the multi-tenant property was 90% leased to 42 tenants, including One Beacon Insurance, Conopco, Wachovia, RBC Capital Markets, Robert Baird, Pine River Capital and HQ Global Workplace.

In 2009, the Building Owners and Managers Association named the tower “The Outstanding Building of the Year” in the suburban, low-rise category. The property is seeking certification as a Leadership in Environmental and Energy Design (LEED) building.

Based in Newport Beach, Calif., KBS REIT II is a public, non-traded REIT, which means its shares are not traded on any stock exchange. Including the purchase, KBS-affiliated companies have added more than 6.6 million sq. ft. of commercial real estate since the beginning of 2010.

“The 601 Tower at Carlson Center is widely recognized as one of the most prominent suburban trophy assets in the Minneapolis market,” says Bill Rogalla, senior vice president and director of acquisitions in the central region for KBS Realty Advisors, a private equity real estate company founded in 1992 that is registered as an investment advisor with the Securities and Exchange Commission.

“We are proud to add this asset to our national portfolio and expect its unique blend of quality, location, architectural significance and park-like amenities to result in strong long-term tenant retention,” adds Rogalla.

A suburban landmark, 601 Tower at Carlson Center was completed in 1989 with polished burgundy granite and glass exteriors, and a steeped lighted rooftop. Interior highlights include a two-story marble atrium featuring a 55-foot rotunda, cascading fountain and dramatic circular staircase.

The property is part of a two-building complex that also encompasses a 22-acre lake with lakefront amphitheater, health club, upscale cafeteria and other services.

Since 1992, KBS has completed transactional activity of approximately $20 billion via 19 separate accounts, six commingled funds and five non-traded REITs. KBS has offices in Newport Beach, San Francisco, Chicago, Dallas, New York, Washington, D.C., Atlanta, and Los Angeles.

The building in Minnetonka becomes the third Minnesota property owned by KBS-affiliated companies, and joins the Cedar Bluffs Business Center in Eagan and Cardinal Health Distribution Facility in Champlain.

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