Wells Fargo & Co. has listed five downtown Des Moines properties for sale, including one the financial institution originally said it would retain, the Business Record has learned.

In late January, Wells Fargo announced that by year’s end a large number of downtown workers would move to the company’s Jordan Creek campus in West Des Moines. At the time, officials said the company would likely sell properties at 800 Walnut St. and 206 Eighth St. but would retain its 10-story office building at 801 Walnut St.

The building at 801 Walnut St. is among the five properties Wells Fargo has listed for sale, a spokesperson said.

“We are exploring a sale of 801 Walnut Street,” a spokesperson wrote in an email. “If we find a buyer, we plan to lease back a portion of the space for the Wells Fargo employees who will remain in downtown Des Moines.”

The company’s legal department and corporate and investment banking team are expected to remain downtown and would out of offices at 801 Walnut St., known as the Northstar Building, officials have said.

CBRE Inc. is listing the five Wells Fargo properties for sale. Four of the properties include office buildings with combined space of just over 870,000 square feet. The fifth property is an eight-story parking garage. The value of the properties totals over $118 million.

Listing prices are not included with a brochure about the properties. However, Tyler Dingel, an executive vice president at CBRE’s Des Moines office, said the asking price for the properties is less than $100 per square foot. The asking prices are flexible depending on whether properties are sold individually or in a package deal, he said.

“If you look at replacement costs in today’s world or at comparable [sales], we are competitive with the market,” Dingel said citing the city of Des Moines’s planned purchase of the former Nationwide building at 1200 Locust St. The city would pay $30 million for the property, or about $85 per square foot.

Wells Fargo owns 12 properties in downtown Des Moines, including six surface parking lots, four office buildings, a warehouse and a parking garage. Properties for sale include:

• 801 Walnut St. The 298,882-square-foot structure was built in 2005. It also includes underground parking. The property in 2022 was valued at $43.8 million.
• 800 Walnut St., known as the Skyview Building. Built in 2002, the nine-story, 328,495-square-foot building includes 50 underground parking stalls. The property in 2021 was valued at $44.5 million.
• 206 Eighth St., known as the Tower Building. The 11-story building, constructed in 1988, has 188,769 square feet of space. The property in 2021 was valued at $12.7 million.
• 207 Ninth St., known as the Founders Building. The three-story structure, with 53,868 square feet of space, was built in 1910 and remodeled in 1990. The property in 2021 was valued at $2.5 million.
• 800 Mulberry St., a 1,625-space parking garage. The concrete structure was built in 2002. The property in 2021 was valued at $14.4 million.

All of the properties have access to the downtown skywalk system.

The amount of vacant office space in Des Moines’ central business district has more than doubled in the past four years, according to CBRE’s fourth-quarter market report. In 2022’s fourth quarter, 17.9%, or 1.16 million square feet, of the downtown area’s more than 6.5 million square feet of office space was vacant, the report showed. In 2019’s first quarter, 7.6%, or 477,573 square feet, of downtown’s office space was vacant, CBRE data showed.

Hybrid work arrangements, layoffs and rising interest rates have made it difficult to fill vacant office space and sell office buildings, especially those located in central business districts. Those challenges mean getting properties that are for sale in front of as many potential buyers as possible, Dingel said.

Converting one or more of the office buildings to multifamily is a redevelopment option, Dingel said. “Our multifamily market downtown is still fairly strong. There’s more demand for that type of product than there would be for a traditional office user.”

In addition, Dingel said the CBRE team will talk with city and economic development officials about companies that have expressed interest in relocating to a new market. “We’ll be looking at your traditional office users, groups that prefer to own and are looking for an opportunity to buy a building at a number that would be well below replacement costs,” he said.

It’s difficult to know how long it will take for the properties to sell, Dingel said. “Wells Fargo understands the challenges of today’s market and they understand that we’ve got to be flexible when we start talking about pricing and timing. … At the end of the day, it doesn’t do Wells Fargo a lot of favors to hold on to these buildings for a number of years. We all would like to find the best solution for a re-tenant or repurpose of the buildings.”

Numerous options exist for selling the properties, Dingel said. “We can sell buildings off individually or as a portfolio or in groups of two.”

One thing that likely won’t happen, at least immediately, is selling the parking garage before the office buildings are sold, Dingel said. “If you sell the parking first, you’re left without any parking for the office buildings. You don’t want to box yourself into the corner.”
  
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