Central Business Districts continue to struggle to make a come back particularly in blue cities and states post covid. We’ve seen massive discounts in building values when sales have actually happened. Many office towers have seen 60-80% discounts from their last sales price.
Minneapolis continues to struggle and the taxing authorities are recognizing that the values aren’t what they used to be. That said, they have only taken a slight dip in terms of the assessed values placed on the properties for tax purposes.
According to the Minneapolis / St. Paul Business Journal, below are downtown Minneapolis’ top five largest office towers and the change in their valuations from assessment year 2024 to 2025, according to recently updated Hennepin County records.
- Capella Tower, 225 S. Sixth St.: 2024 value was $147.7 million; 2025 value is $131.6 million, representing an 11% drop
- IDS Center, 80 S. Eighth St.: 2024 value was $167.5 million; 2025 value is $135 million, a 19% drop
- Wells Fargo Center, 90 S. Seventh St.: 2024 value was $173.6 million; 2025 value is $106.1 million, a 39% drop
- U.S. Bank Plaza, 200 S. Sixth St.: 2024 value was $156.1 million; 2025 value is $111.1 million, a 29% drop
- City Center, 33 S. Sixth St.: 2024 value was $139 million; 2025 value is $116.7 million, a 16% drop
The Wells Fargo Center sold at a substantial discount last year for $85MM. This was about 70% lower than it’s peak value in 2019. It would seem the tax assessors may still have a way to go before they get to “market” value.