KBS Secures New Tenant at Minneapolis Office Tower

60 South Sixth. Image courtesy of KBS Realty Advisors

Infrastructure design firm HNTB has signed a lease with KBS Realty Advisors to occupy 15,187 square feet at 60 South Sixth in downtown Minneapolis. The tenant will relocate from the city’s West End neighborhood to the 38th floor of the Class A office building. JLL brokered the agreement on behalf of both parties.

According to CommercialEdge information, HNTB will join the existing roster at the 710,332-square-foot building, including Fredrikson & Byronhe, Prudential Capital Group, Harvard Services Group, Capital Real Estate, Hessian & McKasyat and Stifel, among others.

The same data provider reveals that KBS acquired the asset back in 2013 for $126.5 million, through the firm’s KBS Real Estate Investment Trust III. The property is also subject to a $613.2 million loan provided by Bank of America, set to mature in 2031.

JLL Managing Director Brent Robertson and Vice President Andrea Leon brokered the lease signing on behalf of KBS, while Senior Vice President Eddie Rymer represented HNTB. Earlier this month, the landlord signed another 49,490-square-foot lease at the recently renovated Northland Center office park in Bloomington, Minn.’s commercial district.

A revamped workspace

60 South Sixth spec suites. Image courtesy of KBS Realty Advisors

Since the acquisition, KBS invested more than $24 million in upgrading the property that dates back to 1991. Last year, the company allocated more than $6.5 million to the modernization of the fitness center and common areas. KBS is also in the process of designing a new tenant lounge area, indicating that further improvements are underway.

At the beginning of this year, KBS unveiled a pair of fully furnished spec suites spanning two floors at 60 South Sixth. Positioned on the 11th and 12th floors, the seven suites feature a range of amenities, including café spaces, collaboration hubs, private phone areas, shared meeting spaces and a wellness room.

60 South Sixth is located on the Nicollet Mall, offering access to nearby dining and retail options. Minneapolis−Saint Paul International Airport is some 13 miles from the property, while University of Minnesota is less than 3 miles away.

Leasing office space in Minneapolis

60 South Sixth lobby. Image courtesy of KBS Realty Advisors

A recent JLL report reveals that in the fourth quarter of 2022 the amount of office space leased in the Minneapolis-St. Paul market reached a total of over 900,000 square feet, exceeding the 820,000-square-foot average since the second quarter of 2020. Piper Sandler’s 113,000-square-foot commitment on the top four floors of North Loop Green played a leading role in this increase.

The same source shows that at the end of 2022 total office vacancy  in the market reached 19.5 percent. The region’s negative absorption for the year hit almost 3 million square feet. Class A office space wasn’t immune to negative absorption, although it outperformed other asset classes, bearing a vacancy rate of 17.7 percent.