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GlobeSt.com UPDATE: Parkway Moves on JV Partner Buyout

CHICAGO-Parkway Properties, Inc. now owns all but 7% of 233 N. Michigan Ave., a property now worth $194.3 million based on the REIT's most recent transaction with Investcorp, which reduced its stake from 70% to 7%.

By Mark Ruda | Updated on January 17, 2005

CHICAGO-Parkway Properties, Inc. is once again the majority owner of 233 N. Michigan Ave., having closed the first step toward buying out Investcorp’s 70% stake in the 1.1-million-sf office building. Investcorp is getting $136 million for a stake that cost the New York-based firm $125 million in 2002.

The Jackson, MS-based REIT has reacquired all but 7% of the building, which is now worth $194.3 million, or $182 per sf. Parkway Properties paid $173.5 million for the Illinois Center asset in June 2001. Investcorp rewarded Parkway Properties with a $400,000 incentive fee based upon the economic returns the property generated during the two years it was involved in the ownership. Now 91% occupied, the building is generating a 9.5% capitalization rate, according to Parkway Properties.

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