German fund manager Union Investment has extended its strategy to invest in US secondary cities through a $165m (€126m) office acquisition in Minneapolis.
Union has bought 50 South 10th Street from US real estate investment trust (REIT) Franklin Street Properties.
The property was bought for the open-ended UniImmo Europa fund. The deal comes one year after Union invested in a fully let office complex in Austin, Texas for the same fund, which now has seven US assets.
Union said it was looking to increase its investment in “high-growth regional centres” and was attracted to the region by its low unemployment level.
Martin Bruehl, head of investment management at Union Investment Real Estate, said: “US secondary markets represent an excellent alternative to traditional gateway cities for our international funds.
“We intend to significantly extend the scope of our investment in core properties in America.”
Minneapolis, in the state of Minnesota, Bruehl added, benefits from a sustainable outlook for jobs growth.
“Just like Austin, it’s a perfect fit with the requirements of our secondary-city strategy for the US,” he said.
The 500,000sqft building is home to the US retailer, the Target Corporation, which occupies almost 80% of the asset’s rental space.