(To read more on the net lease market, click here.)
CHICAGO-Faced with the loss of its two largest office tenants, both occupying space at IBM Plaza, Prime Group Realty Trust has signed renewals with three tenants for a combined 88,555 sf. However, the renewals come after Jenner & Block agreed to co-anchor a new development to the west, signing a 375,000-sf deal for the top floors of a 40-story building at 350 N. Clark St.; while namesake tenant IBM Corp. already gave notice to leave 330 N. Wabash for the Hyatt Center at 71 S. Wacker Dr.
Architectural firm Perkins+Will signed a 10-year extension, agreeing to remain in its 48,997-sf space through June 2017. AT&T agreed to a three-year renewal that kicks in next September, keeping 31,735 sf occupied. And BCI Aircraft Leasing Inc. signed a 10-year renewal on its 7,823 sf.
Although terms were not disclosed, asking net lease rates at the 1.5-million-sf 330 N. Wabash Ave. start at $14 per sf. About 30% of the building is available.
IBM Corp., which pays nearly $8 million a year for its 280,670 sf, plans to leave the 1.4-million-sf building between Marina City and Trump International Hotel & Tower next August. Jenner & Block will co-anchor the 1.1-million-sf 350 N. Clark St. with developer Mesirow Financial when it is completed in 2009. The law firm occupies 338,000 sf at 330 N. Wabash Ave., and is the largest tenant in Prime Group Realty Trust's wholly-owned portfolio, paying more than $14 million a year. Together, Jenner & Block and IBM Corp. account for nearly 20% of Prime Group Realty Trust's rental income.
The REIT, now owned by Lakewood, NJ-based Lightstone Group, LLC, also weathered the departure of former accounting giant Arthur Andersen, LLP. In addition to leaving a 579,980-sf hole at 33 W. Monroe St., it also exited 76,490 sf at 330 N. Wabash Ave. in 2003.
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