3-Year Term Extension Negotiated for $151.66Mln Loan on Minneapolis’ IDS Center

CRE Direct
By Orest Mandzy
December 13, 2023

The owner of Minneapolis’ IDS Center office complex has negotiated a term extension of up to three years for the property’s $151.66 million mortgage, which had matured in May.

The property, at 80 South 8th St., is owned by Accesso Partners of Hallandale Beach, Fla. It’s comprised of a 57-story building and eight-story annex with a total 1.42 million square feet of office space, 100,810 sf of retail and a three-level underground parking garage. Accesso had purchased it in 2013 for $255 million.

At the time, it was 88 percent leased and had generated $19.31 million of net operating income.

Its mortgage is securitized through two CMBS transactions: JPMorgan Chase Commercial Mortgage Securities Trust, 2013-C13, holds a $76.87 million piece, while JPMBB Commercial Mortgage Securities Trust, 2013-C12, has the remaining $74.79 million piece.

The loan had transferred to special servicer LNR Partners last February as it was expected to default at its maturity. Accesso continued to make debt-service payments even after the loan’s maturity, which likely helped in its negotiations. It was advised in those talks by Iron Hound Management Co. of New York.

IDS Center was 75 percent occupied as of June, according to servicer data compiled by Trepp Inc.

It was on track to generate $13.15 million of net cash flow for the year. That’s nearly 30 percent more than needed to fully service the existing loan, which amortizes on a 30-year schedule and pays a 4 percent coupon, but is likely well shy of the amount needed to support a new loan given today’s higher prevailing interest rates.

The property’s appraised value was cut by nearly 30 percent earlier this year, to $180 million.

The term extension gives Accesso additional time to lease up the property and find replacement financing. The company noted that two years ago it had completed a renovation of the property’s Crystal Court, the property’s central plaza that was designed by renowned architect Phillip Johnson. Meanwhile, it has completed 16 leases so far this year totaling 121,670 sf.

“This extension enables us to continue doing what we’ve done successfully for many years: adeptly managing the iconic property while executing a highly successful leasing program,” said Deb Kolar, general manager overseeing the IDS Center at Accesso.