The tower is set in Chicago's financial district at 225 W. Washington St. and is home to several renowned law firms, hedge funds and serves as the Marmon Group headquarters.
Yet, with the building also comes steep hurdles. In the last 18 months, several companies have vacated their dated offices in the financial district for newer, larger, technology-enabled space in the booming West Loop. With the building's occupancy rate leveling out at 82%--despite being located less than two blocks from the West Loop corridor--Newman admits there is challenging work ahead.
The building, built in 1987, offers 18,000-sf floorplates--much smaller than the 32,000-sf floorplates offered in the West Loop. "This building is ideal for smaller law firms or insurance companies," Newman tells GlobeSt.com. "Given the floorplate size, we're not going to attract big users. This location is good for small- to mid-size users who don't want to get swallowed up in big building and floorplates, and who want better identification."
Newman says rental prices will also help lure tenants. With asking rates hovering over $15 per sf, the building is more budget-friendly than those in the West Loop, where rents have spiked to $25 to $30 per sf.
"We want to push occupancy up to a stable level, but we're not looking for a quick turnaround," Newman admits. "We think we can get some cash flow in the leasing, but first we'll have to market the location and the quality of the building."
Golub & Co.'s Lee Golub, executive vice president, and Michael Goldman, senior vice president of finance and acquisitions, negotiated the transaction for the buyers. Brian Nagle and John Gavin of Cushman & Wakefield Inc.'s Chicago office represented the seller. Boston-based TA Associates served as advisor to the State of Tennessee.
Newman says the company's strong relationship with internationally based Quinlan is a positive aspect of the deal in and of itself. The acquisition represents the first US joint venture between the two companies. They have worked together on several deals in central Europe.
"They are terrific people," Newman says of the Irish investment firm. "They are honorable, direct, and they delivered. That is much more than half the battle."
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