Downtown Minneapolis building sells for 90% less than it did in 2019

Another sign of the struggle facing our downtowns as two Minneapolis office towers sell for a fraction of what they were worth just five years ago.

The Forum buildings on the 900-block of 2nd Avenue sold last week for $6.5 million. That comes after selling for more than $73 million in 2019. The 634,000-square-foot Forum buildings were previously known as International Centre and Oracle Centre and are just across the street from the iconic Foshay Tower .

Minneapolis Mayor Jacob Frey telling WCCO's Chad Hartman the way of the future is office-to-residential conversions.

"What we're doing as you know, is a significant work around these commercial to residential conversions," Frey explains. "Recognizing that people still very much want to live here and are moving here. They want to be in a dense and vibrant atmosphere and we're trying to incentivize those developers to shift it and it's gonna be stuff way beyond that. So we gotta be thinking outside the box."

By "thinking outside the box," Frey says 8:00 to 5:00 daily office days are over, and he'd like to see downtown transform into more of an entertainment district.

The Forum buildings were built in the 1980s and Minneapolis-St. Paul Business Journal notes the buildings currently have an occupancy rate of 45%. There's no word from the buyers, three New York-based LLC's, on future plans for the property. One of the landmark tenants of the building is Ruth's Chris Steak House.

This is far from the first major discount on office in downtown Minneapolis. The Kickernick Building and LaSalle Plaza 70-80% their previous purchase prices as well.

The downtown workforce is back, at least Tuesday through Thursday, while at the same time 'For Lease' signs seem to dot every corner. The downtown vacancy rate of 21% and declining property values threaten to spike property taxes citywide.

It might be worse in St. Paul . Mayor Melvin Carter says the future of St. Paul's downtown is among the top concerns that keep him up at night. Longtime downtown business TKDA relocated to the suburbs, U.S. Bank is leaving downtown for the city's west side, the only downtown grocery store Lunds and Byerlys cutting its hours, and the State of Minnesota considering consolidating a chunk of its downtown workers at the capitol complex up the hill.

Leaders in St. Paul, like neighbors in Minneapolis, are looking at ways to convert buildings to residential space, but that is something President of the St. Paul Downtown Alliance Joe Spencer says takes considerable time.

"The best downtowns that anybody ever goes to have a great mix of people," said Spencer. "These are the spaces that you walk through that have a mix of visitors, people who are there to work, people who live there. They come from a variety of different backgrounds, they're in that place for a variety of different reasons, and it makes for just the most kind of exciting and vibrant atmosphere."