#United States #Minneapolis #Wells Fargo Center #Cross Ocean Partners #Onward Investors

Acquisition of the Wells Fargo Center in Minneapolis

On December 12, 2024, a significant joint venture was announced involving Cross Ocean Partners, Neuberger Berman, and Onward Investors, as they successfully acquired the iconic Wells Fargo Center located in downtown Minneapolis. This 57-story skyscraper stands out as the city's third-tallest building and is an anchor of the Minneapolis skyline, having opened its doors in 1987.

Historical Significance

The Wells Fargo Center was initially designed by the internationally renowned architect César Pelli, reflecting an art deco style that captivates inhabitants and visitors alike. Historically, it served as the headquarters for Norwest Corporation, which later became merged with Wells Fargo. The building’s architectural prestige and the central location make it a notable asset in the real estate market.

Current Leasing Situation

Currently, the building displays a leasing rate of 62% with up to 110,000 square feet of contiguous space available. The trophy office building (1.15 million square feet) has enjoyed a remarkable occupancy rate of 95% on average since 1988, highlighting its desirability among tenants in a competitive market.

Renovations were undertaken after the property’s sale in 2019, demonstrating a commitment to modernization while preserving the property's historical essence. The new ownership group plans to further invest strategically to elevate the Wells Fargo Center, fortifying its reputation as a premium office space.

Future Prospects

Jon Lanners, Partner at Onward Investors, emphasizes that this acquisition is aligned with their value investment strategy aimed at capitalizing on market dislocations. He remarked, "This acquisition epitomizes our fundamental value investment strategy of opportunistically capitalizing upon market dislocation and demonstrates Onward Investors' continued commitment to playing an active role in Minneapolis' revitalization."

Investments in state-of-the-art amenities in conjunction with the timeless design of the Wells Fargo Center are set to enhance its appeal, targeting tenants who seek a distinguished presence in a vibrant urban landscape.

The Management Team

Cross Ocean Partners, with about $8.7 billion in assets under management and a team of 78 employees, is spearheaded by CEO Graham Goldsmith and Head of Europe Steve Zander. Their global investment approach spans various asset classes, including real estate.

As for Neuberger Berman, this employee-owned, independent investment management firm, established in 1939, oversees a staggering $509 billion across different investment vehicles, reflecting a robust commitment to active management and research-driven strategies.

Based in Minneapolis since its inception in 2011, Onward Investors is making its mark on the commercial real estate scene, particularly focusing on optimizing opportunities in the aftermath of market upheavals. The firm couples its extensive expertise with a robust understanding of credit and equity investing, positioning itself strategically in the market.

Conclusion

The acquisition of the Wells Fargo Center signifies a notable investment step for the involved parties, reinforcing their commitment not only to the property but also to the continual growth and revitalization of Minneapolis itself. As they move to enhance this architectural marvel, stakeholders are optimistic about the opportunities that await both the investors and the city alike.