T3 is One of Two Buildings Leased by the Ecommerce Giant that LaSalle Purchased in a Week
LaSalle announced on Tuesday that it bought the property at 323 Washington Ave. N in Minneapolis, MN from the original developer, Houston-based Hines.
The company had been in pursuit of T3 since late last year, said David Schreiber, LaSalle’s managing director of acquisitions. He declined to disclose the purchase price.
The deal closed on Friday, but documents associated with the sale had not yet been submitted to the Hennepin County property recorder’s office as of Tuesday morning.
Hennepin County gave T3 an assessed value of $50.15 million for taxes payable in 2019.
At the time of the sale, the 220,000-square-foot building had an 82-percent occupancy rate, Schreiber said.
Seattle-based e-retail giant Amazon has a long-term lease for the top three floors, which accounts for roughly half the building’s available space, as well as an option to expand into the fourth floor, which is currently vacant. The second floor houses a co-working space run by New York City-based Industrious, a coworking space provider, while the third is occupied by smaller tenants in the tech, finance and consulting fields.
T3 includes 10,000 square feet of retail space on its ground level, which is currently leased out to the Dalton & Wade restaurant and a boutique fitness studio, Bar Method. In addition, T3 has 10,000 square feet of common area space for tenants that includes a hose of amenities including a fitness center, 100 bike stalls and a rooftop patio.
Schreiber said LaSalle was drawn to the building because of its nearly brand new construction, strong anchor tenant, and location in a well-connected urban area with easy access to housing, dining and entertainment.
In these respects T3 is much like one of LaSalle’s earlier purchases in the Twin Cities, Mayo Clinic Square, once a failed vertical mall in downtown Minneapolis that was renovated and repositioned by developers Irv Kessler, Phillip Jaffe and Bob Lux. It reopened after work concluded in 2015. In spring 2017, LaSalle paid $98 million for the property, which now houses Mayo Clinic, the snack maker Jack Links and practice facilities and offices for two professional basketball teams – the Minnesota Lynx and the Timberwolves.
“We are very focused on buying office that will stand the test of time, that’s got good synergy with transit and amenities,” Schreiber said. “Mayo Clinic Square had a lot of the same characteristics though it’s a very different building.”
T3 is Phase II of a seven-acre master development spearheaded by Hines called North Loop Green, which sits across from a major league baseball stadium and just off the main drag of the North Loop, a chic neighborhood northwest of Minneapolis’ downtown core.
Phase I of North Loop Green was a mixed-use development called Dock Street Flats, which was built in 2014. About 1.8 acres of the original site remain undeveloped. Neither Dock Street Flats nor the surrounding parcels were included in the deal with LaSalle.
Executives at Hines could not be immediately reached for comment.
During the last week in May, LaSalle also picked up another Amazon-anchored property on the West Coast, paying $129.5 million for 202 Westlake in Seattle, WA, according to CoStar data.
