By Gabriel Circiog, Associate Editor
Target Corp. could get the ball rolling in the downtown Minneapolis real estate market. After it recently reached a major lease agreement for 50 S. 10th St., local experts are expecting a chain reaction, Finance & Commerce reports.
Target will lease all the rentable office space in the building, a total of 449,233 square feet, by 2017 and will hold the space March 31, 2030. Wakefield, Mass.-based Franklin Street Properties Corp., through a wholly owned company called FSP 50 South Tenth Street Corp., owns the building and through a news release suggested that the property could be sold. The company said that its ownership corporation “plans to consider long-term permanent mortgage financing and/or a possible sale of the property.”
Target currently leases or subleases 259,000 square feet in the building; the direct lease for the whole building will include no early termination rights. The company also received a $24 million tenant incentive payment from the owner, which according to U.S. Securities and Exchange Commission documents filed by Franklin Street Properties’ ownership corporation and quoted by Finance & Commerce, is “in lieu of any tenant improvement allowance, abatement of rent or any other lease concessions.”
Jim Vos, a principal at Cresa, thinks the property is at its maximum value right now and it would be the best time to sell the building.
The downtown commercial real estate market is expected to see an increased demand for office space as 25 companies, currently listed on the building’s directory, will be trying to find other office space in the area in the coming years.
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