An eight-story downtown Minneapolis office building recently sold at auction for close to one-third of what it fetched six years ago.

An individual investor who’s based in Florida acquired the roughly 202,000-square-foot building at 330 S. Second Ave. for just under $7.3 million in cash, Hennepin County property records show. The deal, which closed on May 8, works out to $31 per square foot.

A real estate investment firm headquartered in Washington, D.C. paid $20 million for the Class B office building in March 2018.

Built in 1980 and last renovated in 2014, the 330 South Second building was up for auction in late November on the Ten-X platform, with a starting bid of $3 million. At the time of the sale, its occupancy was 76%, according to CoStar.

Hennepin County estimates that the building’s current market value is $11.9 million, a significant decline from last year’s assessment of $15.3 million.

Similarly, other downtown office buildings have traded at steep discounts at auctions over the past year, as values have continued to decline.

Eden Prairie-based Hempel Real Estate, based in Eden Prairie, acquired LaSalle Plaza, a 620,000-square-foot office building at 800 LaSalle Ave., for $46 million last June. That’s a third of the $155 million that it sold for in 2011. The building was more than 30% vacant when the previous owner gave the building to its lender in late 2022 instead of making more loan payments to avoid foreclosure, Axios reported.

Last year, Hempel also purchased the Pence Building, a historic 90,000-square-foot office building at 800 Hennepin Ave., for $3.6 million. That's about half of its 2023 assessed value. Hempel has said it might convert the building into housing.

Real estate experts are concerned about what distressed downtown Minneapolis properties will do to the city's tax base, and local officials are starting to take notice.

Earlier this month, the Minneapolis City Council approved a legislative directive related to commercial-to-residential conversions, which allows the council to get more data to inform policymaking around the effort to address empty office buildings.