The building occupies a city centre site adjacent to Hammerson's proposed Sevenstone retail development, where CPO notices have now been served.
Telephone House occupies an island site and comprises 90,000 sq ft of offices let to BT until 2013, a 456-space multi storey let to NCP, together with a nightclub, bar and showroom.
The total rental income is about £890,000 per annum, according to Sheffield-based Crosthwaite Commercial which acted for Ace Liberty and Stone along with Maybridge Commercial. Knight Frank represented Rreef.
"This is a landmark building in Sheffield city centre, virtually surrounded by one of the largest new retail schemes in the north of England, and offers our clients enormous asset management opportunities," said Martin Crosthwaite at Crosthwaite Commercial.
"It is not often that substantial properties such as this become available in the city and we are pleased to have been in a position to introduce this investment to Ace Liberty and Stone and negotiate the purchase."
Ace Liberty and Stone chairman Mark Thomas added: "This is Ace's second recent acquisition in Sheffield having recently re-geared the leases to Sheffield City Council at New Bank & Sovereign House in Bank Street and subsequently sold the newly created investment.
"Telephone House is a good investment and we look forward to unlocking further potential from the site."