RBC Plaza in downtown Mpls. to be sold for $126.5 million

  • Article by: ADAM BELZ , Star Tribune
  • Updated: January 29, 2013 - 9:00 AM

KBS Real Estate Investment Trust will convert some of the retail area in RBC Plaza into more office space.

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mrprogressiveJan. 28, 13 9:57 PM

Good idea on converting retail to office. Both this tower and Gaviidae could benefit from this conversion. Retail is dead in these towers.

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callmeronJan. 28, 1310:43 PM

Wow. I had no idea the rate of return from real estate was so low. $8.6 million in rent on a $126 million building, that's a dismal rate of return on investment with no mention of maintenance costs. Factor in taxes and you are barely getting 4% ROI, maybe as little as 3%. This is a sucker's investment. Maybe the parking garage generates nice profits, because the office rentals do not. There is a reason the seller is selling this office tower. Think about it. The anchor tenant, Royal Bank of Canada, has been struggling with its U.S. investments for years, including the former Dain Rauscher which it acquired just as the technology bubble was bursting back in 2000. Dain Rauscher is not the only disappointment in RBC's American portfolio. The geniuses who run RBC have a habit of buying businesses near the peak of market bubbles, as it did with its consumer banking and mortgage businesses. RBC has been selling-off its American businesses like its bank back in 2011. The RBC Wealth Management business (which is the anchor tenant in this building) was not part of the consumer bank sale. However, I think it is more likely than not that RBC will be selling its wealth management business in the future and if that happens, it could leave this building with a lot of empty space making for a very bad investment.

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danscJan. 29, 13 3:13 AM

Brookfield was a community asset. Hate to see them leaving Minneapolis. They have been involved in City Center, RBC Plaza, Gavadae, IDS Center many years ago, and buildings in St. Paul.

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nordeastmplsJan. 29, 1312:27 PM

Good riddance to Brookfield. The have had City Center for years and that building is an eyesore, a boarded up bunker from the street. Maybe a new owner will pony up some bucks and make it an attractive place.

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