Hines sells historic North Loop office building to local investor
Hines sells historic North Loop office building to local investor
One of the early North Loop warehouse-to-creative office conversions has sold to a local investor for $9.25 million.
Water Street Partners of Excelsior said Wednesday it bought the 70,000-square foot Union Plaza building at 333 N. Washington Ave. in an off-market sale.
Hines Interests is the seller. The Houston-based real estate firm bought the building in 2012 as part of a larger, $13.7 million acquisition of property in the North Loop between Washington Avenue and Target Field. Since then, Hines has built the the T3 office building and Dock Street Flats apartments. It still owns one remaining parcel for a final phase, but thus far hasn’t announced plans for the property.
Water Street Partners is planning a moderate renovation of Union Plaza's common areas this fall, including a lobby refresh. The building is 124 years old, but underwent a conversion from a warehouse to office space in 1984.
"These guys were cool before it was a thing," Water Street Managing Partner Jim Hegedus said of the 1980s redevelopers, Investment Management Inc., which will continue to manage the property.
While Hines has done a good job taking care of the building and made improvements to the mechanicals and elevators, Water Street saw an opportunity with the lobby to help increase the building's current 70 percent occupancy.
"If you walk into the lobby it still feels like the 1980s and that's where the capital is going toward," Hegedus said, noting that the renovation will maintain the building's character.
Water Street Partners was formed in 2017 by Hegedus and Joe Boone, a pair of former vice presidents at The Excelsior Group. They made their first purchase last year when the bought the 610 Business Center in Brooklyn Park for $10 million.
“We couldn’t pass up the opportunity to buy Union Plaza. There are so many good things going on in the neighborhood, and this building has flown under the radar in many respects,” Hegedus, said in the press release. “We are excited to invest in the building to bring it more in-line with what tenants are asking for today.”
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