Commercial Property Executive
By Radu Corfus
December 13, 2023
Accesso Partners has secured a loan extension for up to three years for IDS Center, a 1.4 million-square-foot tower in Minneapolis. The owner worked with Iron Hound Management Co. to arrange the deal, as the firm is seeking longer term refinancing options.
Accesso acquired the building in 2013 for $253 million. The purchase involved a $182.5 million CMBS loan from Wells Fargo Bank originated by JPMorgan Chase with a 4 percent fixed rate, according to CommercialEdge data.
The note entered special servicing in February and reached its maturity date on May 1st, with a $154.4 million outstanding balance. Its master servicer is Midland Loan Services, an affiliate of PNC Bank, while the special servicer is KeyBank National Association, public records show.
Completed in 1972, IDS Center rises 57 stories at 80 S. Eighth St. in Minneapolis’ CBD and is LEED Gold certified. In 2021, the owner completed an extensive renovation to the building’s common areas. The property’s assessed value registered a nearly 5 percent drop from 2022’s $270 million figure, reaching some $257 million, Hennepin County records show.
As of September, the office tower was 76 percent leased, above the rate registered in the previous couple of years, but below the 80 percent figure from 2019, the Minneapolis/St. Paul Business Journal reported. Tenants include various banks, law firms and wealth management companies.
Looming distress in the Minneapolis office market
Iron Hound Managing Director Christopher Herron and Director Kevin Thompson, along with Associate Anthony D’Amelio, assisted Accesso in negotiating the loan extension.
As much of the debt burdening office markets is slated to mature in the near future, investors and banks make active efforts to lower their exposure to the asset class. As of October, the amount of debt reached $920 billion nationally, 16.1 percent of which is due next year, according to a recent CommercialEdge market bulletin. The total office loan volume in Minneapolis was more than $9.5 billion, 28.9 percent of which is bound to reach maturity in 2024 and nearly 44 percent by 2026, the same source shows.