Capella Tower, the second-tallest building in downtown Minneapolis, was surrendered by Shorenstein Properties to its lender, MetLife, after failing to find a buyer. The transfer likely involved a deed in lieu of foreclosure to avoid legal actions from mortgage default. The building’s market value has significantly dropped from the $255 million Shorenstein paid in 2018 to $196.5 million. Office vacancy rates in downtown Minneapolis remain near record highs, contributing to plummeting property values. Erin Fitzgerald of JLL described the market as the most challenging in history, making it difficult for investors to secure financing, despite Shorenstein’s successful renovation and leasing efforts.
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