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REIT Anticipates JV Deal for $200M Illinois Center

CHICAGO-Parkway Properties Inc. plans to sell a majority stake in the 1.1-million-sf high rise at 233 N. Michigan Ave. A joint venture partner could be brought on in early 2006 for the 91.2%-leased Illinois Center.

By Mark Ruda | Updated on November 08, 2005

CHICAGO-Parkway Properties Inc. expects to sell the majority interest in its lone Chicago holding, 233 N. Michigan Ave., to a joint venture partner early next year. The Jackson, MS-based REIT acquired the 1.1-million-sf office building in 2001 for $173.5 million, sold a 70% stake to Investcorp International Inc. for $125 million in 2003, then bought back that interest this year for $136 million.

“We are well into the marketing process,” said president and CEO Steven G. Rogers during the REIT’s recent earnings conference call. “I’m pleased with the interest buyers have shown so far. It’s a well-leased, well-located asset that will command attention from the capital markets.”

Despite 91.2% occupancy in the 30-story Illinois Center office building, well ahead of the East Loop submarket, Parkway Properties has nearly $100 million invested there. “We firmly believe it’s in the best interest of our shareholders to diversify the holdings in our portfolio,” Rogers explained, noting the East Loop asset represents 15% of the company’s invested equity capital. Rogers suggested the company expects to stay on as manager and leasing agent for 233 N. Michigan Ave. as well as minority owner.

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