Newport Beach-based Pacific Investment Management Co. has emerged as the likely buyer of one of the most prominent office complexes in downtown Minneapolis, according to news reports from the Twin Cities.
The bond giant, which raised billions of dollars earlier this year to invest in other asset classes, including real estate, is said to be nearing a deal to buy Fifth Street Towers, a two-tower office complex that totals about 1.1 million square feet.
The property includes a 25-story tower built in 1984 and a 36-story tower that opened four years later.
The property’s current owner is said to be a venture between Zeller Realty Corp. in Chicago and Atlanta-based Invesco Ltd.
Terms of the potential sale to Pimco haven’t been disclosed. The properties last traded hands for $110.7 million in 2012 in a lender-driven deal. They previously traded hands in 2007 for $186.4 million, according to local reports.
News of the likely deal was first reported late last month by the Minneapolis/St. Paul Business Journal.
A deal involving Pimco would be the company’s first big real estate transaction in the city and the company’s latest notable commercial real estate purchase.
The bond investor, which has close to $2 trillion in assets under management and runs one of the world’s largest mutual funds, also has a growing real estate portfolio.
Other office purchases it made this year include 2 WestLake Park, a 17-story office tower in Houston’s energy corridor. An affiliate of Newport Beach-based KBS Realty Advisors sold the building in July for $120 million.
Pimco is reported to have raised close to $5.5 billion as of March for its Bank Recapitalization and Value Opportunities II fund, also known as Bravo II.
The fund is reportedly looking to snap up a variety of commercial and residential real estate properties in the U.S. and Europe, among other assets. A separate Bravo I fund is reported to have raised about $2.4 billion in 2011.
The Houston office was purchased by a Bravo-related venture, but it’s unknown whether the Minneapolis towers would also be purchased from those funds.
Corona Construction
Newport Beach-based developer Investment Building Group is proceeding with an industrial project in Corona.
The company recently started construction on an 81,000-square-foot industrial building at 200 River Road.
The project is on a 4.3-acre site near Main Street and just north of the Riverside (91) Freeway. The developer said it should be completed in June.
CBRE Group Inc. First Vice President Tom McAllister is representing Investment Building in leasing the property. The developers bought the site about a year ago.
The property is expected to appeal to light manufacturing, assembly or distribution tenants and could also serve as a corporate headquarters facility.
“With the low vacancy rate of 1.6% in Corona, there’s a lack of available inventory to meet demand for needed space,” McAllister said.
Atlanta Again
An affiliate of Irvine-based Steadfast Cos. has paid $49 million for an apartment complex in Georgia.
The company’s Steadfast Apartment REIT last month completed the purchase of 1800 Barrett Lakes, a 500-unit apartment community in the Atlanta submarket of Kennesaw.
The deal works out to a price of $98,000 per unit. It is the second apartment property the REIT has bought in the Atlanta area in the past few months.
In October, the investment fund paid $98.5 million for the 696-unit Residences at McGinnis Ferry in Suwanee, roughly 30 miles northeast of downtown Atlanta.
The Barrett Lakes property is about 15 miles north of downtown Atlanta and six miles from the new Atlanta Braves baseball stadium location.
It has 39 garden-style buildings on 68 acres, and the buyer said it’s about 96% occupied, with monthly rents averaging $827.
The REIT said it has invested more than $234 million this year in six apartment communities in four Midwestern and Southern states.
