Today was a significant time for downtown Minneapolis' real estate as the distinguished LaSalle Plaza, an office tower previously under distress, has found a new owner. The office tower was recently acquired by Eden Prairie-based Hempel Cos. at an astonishing markdown from its previous selling price, adding a compelling chapter to the city's real estate narrative.

As reported by the Minneapolis/St. Paul Business Journal Hempel Cos. purchased the property for a cool $46 million, a sharp discount compared to the $155 million paid by the Teachers' Retirement System of the State of Illinois in 2011. The figure may not have been disclosed officially. The sale markets a new dawn Minneapolis commercial real estate investors face as the decline in office property values owing primarily to the rise in remote work and reduced demand for office space.

This development could potentially serve as a new beginning for the city's real estate landscape. With many office buildings facing similar predicaments, the sale price of LaSalle Plaza may be indicative of future trends. The building's vacancy rate skyrocketed to over 30% last fall, prompting the landlord to hand the property over to its lender instead of continuing with loan payments. Major tenants, including Rock Bottom Brewery and CBRE left the building, raising the question of whether its longtime anchor tenant, law firm Robins Kaplan, will stick around.

Despite the challenges, optimism is high among local real estate aficionados, largely due to Hempel's successful track record in reviving struggling properties. The firm is recognized for redeveloping the former St. Paul Macy's store into retail offices and a Minnesota Wild practice facility, and transforming the old Midland Bank building into the Hotel Minneapolis (now Hotel Emery), among other notable projects.

The LaSalle Plaza's future under Hempel's wing may not just mark a new era for the building, but a revitalization of downtown Minneapolis' real estate scene as well.

Posted by Isaac Kuehn on


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