Capella Tower, the distinctive office building with the halo in downtown Minneapolis, sold for $255 million – just $10 million more than ASB Real Estate Investments paid in 2006.

San Francisco-based Shorenstein Properties is the new owner of the 58-story tower at 225 S. Sixth St. and the 22-story Star Tribune building attached to it, according to a Friday press release from Washington, D.C.-based ASB.

The latest purchase price is $40 million above what a joint venture by Hine and General Motors Pension Fund paid for the Class A tower in 1995.

At the time of Shorenstein’s purchase, the vacancy rate in the tower was 14 percent, according to CoStar Group.

Together, the two buildings comprise 1.4 million square feet of space. The purchase works out to $182.14 per square foot. Hennepin County values the property at $244.6 million for tax purposes.

Herb Tousley, director of real estate programs at the University of St. Thomas, said it’s difficult to determine why Capella didn’t attract a higher price given the number of years between sales.

“It’s hard to compare it with the last time it sold because the market was a lot different at that point in time,” he said, adding that the 2006 sale was before the market crashed and ASB may have overpaid at the time.

Tousley said it makes more sense to look at recent sales of comparable buildings and analyze them on a per-square-foot basis.

One comparable recent sale – that of the 50 South Sixth tower in downtown Minneapolis last December – brought a higher per-square-foot price ($370) than Capella because that building had more going for it, said Brent Robertson, a managing director with the Twin Cities office of JLL.

“The average lease term at 50 South Sixth was longer and the occupancy percentage was higher at 94,” he said in an interview. “And there’s significant parking income.”

ASB sold Capella Tower to get its money out to put elsewhere, said Larry Braithwaite, an ASB senior vice president.

“After successfully owning the asset for 11 years, Capella had become a less strategic investment from a portfolio diversification standpoint, and the current market dynamics presented a good opportunity to sell and redeploy capital,” he said in the press release.

Shorenstein’s purchase comes just more than a year after it sold the 51-story 33 South Sixth office tower and City Center complex in downtown Minneapolis for $315 million or $194.66 per square foot. Shorenstein purchased 33 South Sixth for $205.5 million in 2012. That $315 million price is still the record for Minneapolis, eclipsing the previous record of $278 million or $199 per square foot for the iconic IDS Center in 2006.

When the 1.4 million-square-foot IDS Center sold again in 2013, its owners took a hit coming out of the recession. The purchase price was $253 million or about $181 per square foot, according to Finance & Commerce archives.

The Capella Tower purchase is the largest Twin Cities office deal of 2018, but still trails the $258.5 million Singapore-based Mapletree paid for the 50 South Sixth tower.

Capella’s tenants include Capella Education Co., accounting firm Baker Tilly, the Star Tribune newspaper, and We Work, the co-working company. Amenities include a 563-stall parking garage, a conference center and two concierges, Finance & Commerce reported previously.

The vacancy rate for downtown Minneapolis office space was 17.8 percent in the fourth quarter of 2017, according to the Minneapolis office of CBRE. The overall Twin Cities vacancy rate is 16.3 percent.

ASB paid $245 million for the building in August 2006. Eight years later, it put $10 million into renovations of the first-floor common space and skyway level, according to Finance & Commerce archives.

The tower, built in 1992, used to be known as the 225 South Sixth building.

Tousley said the sale is another indication that Minneapolis is increasingly on the radar of national investors like Shorenstein.

“They are probably getting a better yield than they would in Boston or Seattle or someplace like that,” Tousley said Friday. “They are finding this market attractive because they can get a decent yield without taking a lot of risk.”

Shorenstein’s other Minneapolis holdings are the three-building Washington Square office complex at 100 Washington Ave. S., and the Maverick Apartments at 120 Hennepin Ave., according to the company’s website.