Hines Reacquires 29-Story Tower for $180M

MINNEAPOLIS-It’s one way to make a profit – sell a trophy building at the peak of the market, and buy it back at the trough. That’s what Hines recently did with the Fifty South Sixth building, a 29-story office, using its Global REIT to buy the tower back from KanAm Grund for about $180 million.

Hines, which developed the building in 2001, sold the property to KanAm for $197 million in 2005. A year later, KanAm US-grundinvest Fonds, a $579-million public fund of the Frankfurt, Germany-based KanAm, was frozen during an SEC investigation with former partner Mills Corp., and KanAm put the building back on the market through New York City-based Eastdil Secured.

The Hines trust repurchased the 700,000-square-foot building in an Eastdil-run auction, says Hines VP John McDermott. Hines had continued to manage the property. “We like the asset. We think Minneapolis is doing better than the average market, with better occupancy. Also, we continue to see demand for high-quality assets,” he tells GlobeSt.com. The building is at 50 S. Sixth St. in the downtown.

The building is 94% leased to tenants such as Dorsey & Whitney LLP, Deloitte LLP, Dunham Associates Inc. and M&I Bank. Stephen Livaditis with Eastdil represented the seller in the transaction, while McDermott and Sargent Johnson represented the Houston-based Hines trust. This is the fifth acquisition for the trust, which has raised about $300 million to invest in commercial real estate properties in the US and internationally.