The distinctive-looking twin white office buildings along East Grand Avenue in downtown Des Moines have a new owner – Krause Group, the parent company of an eclectic group of businesses including Kum & Go convenience stores, Italian wineries and soccer clubs.
200 E Grand LLC, managed by Krause Group, paid East Grand Office Park LP $14.1 million for the property at 100 and 200 E. Grand Ave., Polk County real estate records show. The transaction was recorded on Oct. 6.
“Our plans are to operate ‘as-is’ for several years with the potential to evaluate redevelopment in the future,” Ariel Rubin, Krause Group spokesman, wrote in an email. Rubin declined to provide any other information except to write that the offices buildings have an occupancy rate of over 90%.
The office buildings were constructed in 1985, opening in fall 1986 amid much fanfare. At the time, they were among the few newly constructed structures east of the Des Moines River. For years, downtown Des Moines backers concentrated redevelopment efforts mostly west of the river.
The city of Des Moines, whose offices are one block west of the office buildings, purchased the two-block area on which the structures are now located. The land was cleared of dilapidated buildings and sold to three groups: Principal Mutual Life Insurance Co. (now Principal Financial Group), Health Properties Inc., an Iowa Hospital Association subsidiary, and Des Moines Development Corp. Principal Financial and Health Properties each owned 49.5% of the property; Des Moines Development owned the remaining 1%, real estate records show.
The $10 million project included the construction of two three-story office buildings with a total of 115,000 square feet. The buildings are connected by a ground-level, glass-enclosed walkway. The first tenants of the buildings were the Iowa Department of Economic Development and the Iowa Hospital Association.
Public records show that Principal Financial left the partnership in late 2010. A new modified mortgage through Great Western Bank of slightly over $6 million was filed with the Polk County recorder. East Grand Office Park, managed by the hospital group, took out the mortgage.
The 5.5-acre property, which includes surface parking, is valued at $8.1 million, according to Polk County assessor records.
The office buildings are located in the East Village, an area that has seen much redevelopment in the past 10 years. Most recently a four-story multiuse mass timber building was completed across the street to the south at 111 E. Grand Ave.
Krause Group has expanded its real estate holdings in downtown Des Moines in the past six years. In fall 2018, the company moved into the Krause Gateway Center at 1549 Grand Ave. Between 2014 and 2020, the group has bought 10 properties near its headquarters, spending more than $14.47 million.
This article was originally published on October 14, 2020 on the Business Record website. Read the full article here.