Some Local Office Properties Still Can’t Find Buyers (1)

Despite recent commercial real estate deals, including the $152.9 million sale of the Eagan campus of Blue Cross and Blue Shield of Minnesota, some big office properties in Minnesota remain on the market.

The Twin Cities saw some big commercial real estate sales in the past few months, but there are some big properties in the metro area that haven't been able to find buyers, according to a Finance & Commerce report.

Among the local deals that reportedly took place in recent months are the sales of Two MarketPointe in Bloomington for $60.6 million and the Colonnade in Golden Valley for $52 million. In addition, three local companies sold campuses or office buildings in sale-leaseback deals: UnitedHealth Group's Optum division sold its Eden Prairie headquarters buildings for $50 million; Wayzata-based Cargill, Inc., sold one of its buildings in Hopkins for $69.5 million; and most recently, Blue Cross and Blue Shield of Minnesota sold its Eagan headquarters campus for $152.9 million.

New York-based research firm Real Capital Analytics reportedly tracked $2.27 billion in commercial sales in the Twin Cities last year, an increase of 70 percent compared with 2010. The company tracks office, industrial, retail, apartment, hotel, and development site sales of more than $2.5 million.

However, national trends point to a slowing of sales, and there are still some big properties in the Twin Cities that have been on the market for a while, according to Finance & Commerce.

Since Atlanta-based Delta Air Lines bought Eagan-based Northwest Airlines in 2008, Delta has reportedly been trying to sell Northwest's 190-acre former headquarters. The site is reportedly now listed for $17 million.

In Woodbury, the former State Farm Insurance campus, a 100-acre site at Interstate 94 and Radio Drive, has reportedly been empty since 2005. It is listed for $32 million, and no deals appear imminent for the property.

Target Corporation's downtown Minneapolis headquarters building has also reportedly been up for sale since mid-2011. The property is owned by New York-based Brookfield Office Properties.

Dan Fasulo, managing director of Real Capital Analytics, told Finance & Commerce that deal activity started to slow at the end of last year because of fresh concerns about the stability of the economy. He added that deals for distressed property can be especially difficult to finance.

“If you're talking about buying a vacant office building in downtown Minneapolis, you're not going to find any debt capital for something like that right now,” Fasulo added.

To read the full story in Finance & Commerce, click here.