Jackson, MS-based Parkway Properties paid $173.5 million for the nearly 1.1-million-sf tower in the Illinois Center complex in June 2001. Company officials indicate they were interested in two recently sold neighboring properties, 205 and 225 N. Michigan Ave., but apparently were outbid by Loeb Partners Realty.
"Investcorp had met their economic goals within our joint venture and wished to exit," explains Parkway Properties president and chief executive officer Steven G. Rogers. "We have made offers to purchase comparable assets near 233 N. Michigan and decided this investment meets our acquisition goals and allows Investcorp an exit."
However, Rogers does not rule out taking on another joint venture partner. "Due to the size, quality, rent roll and location, we believe 233 N. Michigan remains a good joint venture candidate on favorable terms," he adds.
While Loeb Partners Realty's recently acquired 1.9-million-sf Michigan Plaza complex is 70% occupied, 233 N. Michigan Ave. boasts a 91% occupancy rate, with no major lease expirations or cancellation options during the next four years. The General Services Administration, Clear Channel Communications, United Healthcare, Young & Rubicam, World Book Encyclopedia and BDO Seidman.
Parkway Properties will close on a 63% stake this month, with the remaining 7% transferring by the end of April. The REIT will use a $100-million mortgage to buy out Investcorp, which remains a joint venture partner in Parkway's Viad Corporate Center in Phoenix.
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