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Digital Realty Buying Lakeside Technology Center

CHICAGO-The Menlo Park, CA-based company strikes a deal for at least $142.6 million for the nearly 1.1-million-sf former R.R. Donnelly Co. printing plant, with another $20 million due if Portland, ME-based seller Carlylecore Chicago can win a property tax break.

By Mark Ruda | Updated on March 21, 2005

CHICAGO-Menlo Park, CA-based Digital Realty Trust, Inc. is paying at least $142.6 million for the nearly 1.1-million-sf Lakeside Technology Center, an historic building at 350 E. Cermak Rd. that was converted to a “carrier hotel.” However, Portland, ME-based seller Carlylecore Chicago could earn another $20 million if it is able to get an undisclosed property tax break.

About 275,000 sf, or 25% of the eight-story building that formerly was used by R.R. Donnelly Co. as a printing plant, remains as vacant shell space. Meanwhile, occupancy in the redeveloped portion of the building is 96%, which allows Digital Realty Trust to envision a first-year capitalization rate of 9% on its first acquisition in the Chicago market.

The Commission on Chicago Landmarks began efforts in 2003 to apply a designation to the 93-year-old Lakeside Technology Center, which according to property records was sold for $22 million in 1999. A Cook County Class L property tax break would result in a lower rate, as would a Class 6(b) exemption.

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