The Blueprint
- St. Paul’s 25-story U.S. Bank Center heads to auction Nov. 10-12 with a $1M starting bid
- The tower is just 26% occupied after U.S. Bank and Bush Foundation departures
- Gallery Professional Building listed for $945,500 after a failed housing conversion
- Both properties reflect broader distress in the downtown St. Paul office market
Editor’s note: On the Market is a regular feature from Finance & Commerce that highlights interesting commercial real estate that has recently been put up for sale. Let us know about CRE that’s on the market at [email protected].
Downtown St. Paul hogs the spotlight in this week’s On the Market. We feature two distressed office properties, including a prominent tower vacated by its Fortune 100 namesake last year.
U.S. Bank Center (St. Paul)
St. Paul’s 25-story U.S. Bank Center heads to auction Nov. 10-12, the latest in a wave of distressed commercial buildings seeking bids in the Twin Cities’ two biggest downtowns. It’s one of several prominent downtown St. Paul properties owned by Madison Equities, the local commercial property investment firm that bought up about a dozen St. Paul buildings in the 2010s before effectively collapsing earlier this year.
The St. Paul Downtown Development Corp. recently purchased the bank note for another Madison Equities property, the Alliance Bank Center, Finance & Commerce reported in June.
U.S. Bank Center is likely to fetch much more than the $1 million starting bid. But as with other prominent downtown properties, like the Seven Steakhouse and Sushi building in the Minneapolis Theater District, exactly how much it commands will be closely watched as a barometer of investor interest in the urban core.
Built in 1973 and “fully modernized” in 1995, the tower portion has unusually flexible core floor plates that “support customized tenant build-outs, accommodating a wide range of occupancy needs,” according to the listing. The typical tower floor is about 15,200 square feet. A two-story structure connected to the tower was built in 1942.
Despite its floor-by-floor customization potential and apparent suitability for a range of tenant types, U.S. Bank Center grew increasingly dependent on its namesake tenant in recent years. The current sales memorandum lists it as 26% occupied, down from 58% in May 2024, the Pioneer Press reported earlier this month. It lost two major tenants in the interim, according to the Pioneer Press: U.S. Bank, which decided not to renew a lease for nine floors late last year; and the Bush Foundation, which vacated following a dispute over a broken elevator.
Address: 101 Fifth St. E., St. Paul
Type: Mixed use (office with ground-floor retail)
Square Footage: 380,171 square feet
Asking Price: $1 million (auction starting bid)
Seller: U.S. Bank Center LLC (North Oaks)
Listing Broker: John McCarthy & Tom O’Brien, Colliers
Gallery Professional Building
The Gallery Professional Building is not up for auction, but it’s priced almost as if it were. The sub-$1 million price tag is an apparent steal that nods to the likely significant work needed to reposition the nearly 50-year-old medical office mid-rise for its next chapter.
That chapter appeared to be unfolding as recently as 2023, after the Salvation Army took over the Gallery and announced a $20 million, “several year” project to convert it into transitional housing for high-need individuals experiencing homelessness.
A business partnership led by Roseville developer Basir Tareen paid $600,000 for the building in 2021. Late the following year, they donated the building to the Salvation Army, passing up what Tareen said was a sales offer “for several times what we paid for it.”
Major Scott Shelbourn, then head of the Salvation Army in the Twin Cities, sounded enthusiastic about the Gallery building’s prospects in early 2023.
“What we’re looking for is long term, kind of transitional housing or some kind of affordable housing, either for singles, or for families,” Shelbourn told KSTP at the time.
But Shelbourn left his post a few months later to assume a leadership post for the Salvation Army division covering Nebraska and the Dakotas. It’s unclear what exactly happened next, but by October 2024, the Gallery building was headed to the auction block with the transitional housing project unfinished. The current sales offering shows the building as “fully vacant.”
Address: 17 Exchange St. W., St. Paul
Type: Office
Square Footage: 122,084 square feet
Asking Price: $945,500
Owner: Exchange Ventures LLC (Lake Forest, CA)
Listing Broker: Mark Hulsey & Sawyer Hulsey, Results Commercial
