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CHICAGO-Estein & Associates USA, Ltd. has agreed to be a 70% partner with Parkway Properties Inc. on 233 N. Michigan Ave., signing a deal that values the one-million-sf East Loop office building at $256 million. The Jackson, MS-based REIT paid $172.3 million for the 30-story building in 2001, sold a 70% interest to Investcorp International Inc. for $125 million in 2003 but bought it back for nearly $140 million last year.

Orlando-based Estein & Associates is no stranger in local joint venture deals, having bought a 50% stake last year in the CitiCorp Center last year after its Germany-based US Treuhand already acquired a 70% stake in 131 S. Dearborn St. The potential partner in the Illinois Center building has 45 days to complete due diligence, and a closing is expected in the second quarter, according to Parkway Properties.

In addition to going a long way toward helping Parkway Properties meet its 2006 capital recycling goals, the deal is at a 7.15% capitalization rate, based on the REIT's reported net operating income for the property. The building, 94.9% leased, is encumbered with a $98-million mortgage at a 7.21% interest rate. Young & Rubicam occupies 122,078 sf.