Why this bargain hunter is making its first bet on a Minneapolis office recovery

By Katie Burke

June 23, 2026

Real Capital Solutions marks regional debut with purchase of West End property

Real Capital Solutions has established a track record for scoping out distressed office deals in emerging pockets. Now, the firm is setting aside its own strategy with a purchase that marks its debut in the Minneapolis area.

The Colorado investment firm finalized a $34 million deal for the building at 3701 Wayzata Blvd. in the city’s West End. The price tag is higher than the last time the property sold, reflecting the renovations its former landlord made to capitalize on the neighborhood’s increasing demand.

“We typically enter a market when we see values that are adjusting quicker than the fundamentals and generally buy at about a 50% discount compared to what they previously traded for,” Chief Acquisitions Officer Adam Abeln told CoStar News. “Clearly we’re not always sticking to that exact strategy.”

Yet for an almost fully leased property that has undergone a slew of renovations and upgrades, Abeln said the big-picture outlook for both the property — as well as the market — made it worth the bet.

The Opus Group, the seller in the deal with Real Capital Solutions, acquired the property in late 2018 for $22.1 million and subsequently converted it into a multitenant building, leasing out virtually all available office space within about a year.

The roughly 308,680-square-foot building, formerly home to one of Target’s satellite offices, is now 99% leased and houses the headquarters for companies such as Tactile Medical, SRF Consulting Group, Regis Corp. and Mobe.

“What attracted us to this investment was the basis in which we were able to get into,” Abeln said. “It’s been fully leased, and while it may fall a bit outside of our core criteria, the cash flow on it is very strong.”

‘Stage of recovery’

The firm’s willingness to pay more is a welcome boost for a market that has struggled to regain the momentum needed to address record-high vacancies and stagnant demand.

Combined with residual impacts of the pandemic, civil unrest has compounded those challenges, creating an environment of uncertainty that local stakeholders say is hardly appealing to tenants or buyers looking to invest in Minneapolis’ office market.

While vacancy rates across other U.S. major cities are beginning to fall from their pandemic-era peaks, Minneapolis’ has largely stalled at about 12%, according to CoStar data.

That has resulted in a lengthening parade of distressed and deeply discounted deals for Minneapolis office properties. Yet for Real Capital Solutions, its debut focuses on what lies beyond current distress and looks toward future opportunities.

“There have been a lot of negative headlines in Minneapolis, but what attracted us to this submarket is that it’s the best-performing one in the area and is not only recovering, but has enough tenant demand to where landlords have more pricing power,” Abeln said.

The weighted average lease term at the West End building is about five years, he said, a timeline that gives Real Capital Solutions a bit of runway to work through broader market challenges before the firm needs to renegotiate those agreements.

At that point, the new landlord is confident that “rental rates will be able to increase substantially,” and the Minneapolis market on the whole will be back on an upswing.

“The most interesting part about this is that there is a limited amount of good office space across the country in which tenants can move in today,” Abeln said. “If you have that, both here and across other properties in our portfolio, you’ve got pricing power and can accelerate the rents, which is something we’ll continue to see as demand picks up.”

Some of the market’s major employers, such as Target, Best Buy, UnitedHealth Group and U.S. Bank, have cut large slices from their regional real estate portfolios. This trend has collided with muted demand, making it an uphill battle for landlords to backfill large blocks of now-vacant space.