Search
 

Sidelines Preferable to Overheated Market

CHICAGO-Parkway Properties, Inc. is among those standing on the sidelines as office assets change hands at frothy capitalization rates compared to a year ago, when the Downtown office rental market was in slightly better shape.

By Mark Ruda | Updated on November 10, 2002

CHICAGO-Despite double-digit Downtown vacancy rates, it appears to be a seller’s market for office properties. UBS Tower at 1 N. Wacker Dr. and 311 S. Wacker Dr., which total 2.6 million sf, were the latest properties to change hands at an average of $265 per sf.

Along with two Central Loop properties being sold by Metropolitan Life by year’s end, brokers report strong interest in Downtown office buildings. However, not everyone is prepared to jump in.

Parkway Properties, Inc. president and chief executive officer Steven Rogers says his Jackson, MS-based REIT is staying on the sidelines in Chicago because of the 7.5% capitalization rates the recently-marketed assets have been commanding. Parkway Properties made its first—and so far, only—acquisition in July 2001, buying 233 N. Michigan Ave. at a 9.5% capitalization. It has since sold off 70% of its $173.5-million investment to New York City-based Investcorp.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.