MINNEAPOLIS-A joint venture of Triple Net Properties LLC and Los Angeles-based Pacific Coast Capital has purchased the 770,000-sf, mixed-use Northstar Center for $62.1 million from BRE/TZ Properties Tenant LLC. The property consists of 700,000 sf of office space and 70,000 sf of retail, as well as a 222-room Crowne Plaza Hotel and a 1,000-space parking facility.

Steve Leathers, associate vice president of acquisition for Triple Net, says the company likes the location of the property. “This is really a prime location in the CBD, the virtual center of the five-mile-long skyway system and access to the trophy centers, it’s the epicenter of where all the office activity is.”

Leathers says the company also sees opportunity with the complex. The oldest section of the property, the 13-story Northstar East, was built 91 years ago. The complex expanded in 1962, when the 17-story Northstar West tower and the hotel were constructed. The property has suffered in the past few years, and now its largest tenant, Wells Fargo, pays very low rent for more than 426,000 sf. Trizec sold the building to Blackstone in 2006 for $58.8 million.

“It’s obviously an older product, it was occupied by Norwest, which merged with Wells Fargo, and the Norwest offices were vacated sometime before 2001. Another large tenant left around the same time,” Leathers tells GlobeSt.com. “Target and a couple other tenants left around then, too. That left class B buildings with vacancy in the 30% range, that was a time when there were an enormous amount of spaces on the market.”

Wells Fargo was able to swing a very low lease rate, much lower than the average $8 to $10 per sf for the area. “Our goal is to expand Wells and increase their rental rates to something closer to the market rate,” Leathers says. “The property is 87% occupied. We’re working on deals to bring the property to the low- to mid-90s by the end of summer.” Triple Net plans to expand Wells and two other companies in the complex, he says, as well as renovating the hotel over the next 18 months. The property is 87% occupied.

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