We’re not sure how long we’re going to be here. But from a pricing standpoint, we feel like we’ve found our bottom. And we are starting to see improvement in other markets, where investors are starting to dip their toes back in.
Watts: We have been slower relative to Sun Belt markets and more primary markets, like a New York. That’s typical of cycles of the past, where, when investors come back, they’ll come back to the primary markets first. Historically speaking, our market has been a steadier growth market — higher lows and lower highs. The major markets tend to have higher highs and lower lows. And investors that want to buy low, sell high, they’re going to gravitate to those markets first.
Wagenseil: I think one of the differences is, pre-COVID, you started to see some real international capital come into the market. There was probably a time when they didn’t really know where Minneapolis was. But given the sort of unique concentration of large companies and the stable economics, it was an opportunity to put out a lot of capital at once.
For international institutions, a big high-rise building was something that was relatively safe, with a 6.5% to 7.5% yield. Those groups, for the most part, are not investing in Minneapolis right now.
Watts: I would say, generally speaking, they’re not investing in the U.S. at the moment. They’ll come back. But they’ll be slower to come back here than New York, L.A., Miami.
Ryan Watts, left, and Harrison Wagenseil were the brokers behind the recent sale of the Wells Fargo and Ameriprise towers. (Aaron Lavinsky/The Minnesota Star Tribune)
Watts: Step one for us is just getting involved with the ownership structure and trying to understand the current situation. Then we try to help people understand what the current values look like. And then from there, we come up with a strategy.