(Read more on the debt and equity markets.)
CHICAGO-A group of New York City private investors, 600 West Chicago Associates LLC, has purchased the 1.8-million-sf, mixed-use building at 600 W. Chicago. A partnership including Taconic Investment Partners, Angelo Gordon & Co. and Centrum Properties Inc. sold the property. Douglas Harmon of Eastdil Secured was the advisor on the deal.
Senior managing director Michael Kavanau and managing director Evan Pariser, both with Holliday Fenoglio Fowler LP, arranged $265 million in financing for the acquisition. The sales price was not disclosed, but was reportedly $300 million. The loan to value was just less than 80%, Kavanau says. The cap rate was not disclosed.
The acquisition financing is a 10-year, fixed rate, interest-only loan. LaSalle Bank is the lender. The interest rate was not disclosed. It is becoming harder to obtain interest-only loans, but "for the right deals you can get it," Kavanau says. "In this case, there was a lot of contractual increases in rents and some lease prospects that are now going to lease," he says.
The building is currently more than 80% leased with both office and retail tenants. Tenants include Banker's Life, Wrigley, Fox, Verizon, Level 3, Japonais Restaurant and David Barton Gym. Kavanau says there was a wide range for the asking lease rates depending on the size and type of space. The asking lease rate was not disclosed. The asking lease rate is $26.51 per sf for class B office space in the River North submarket of Cook County, according to the Grubb & Ellis market report for the first quarter of 2007. Two parking garages are also part of the property. There are a total of 1,270 parking spaces, including the two parking garages and two levels of parking at 600 W. Chicago.
The building was constructed in 1908 as a distribution center for Montgomery Ward and was completely redeveloped by the previous owners in 2001, Kavanau says. The cost of the renovation was more than $100 million, Kavanau says. The building is a designated Chicago Landmark Building and is a national historic landmark listed on the National Register. "It is a really great central location that appeals to everybody but law firms," he says. The building also has three power feeds and "exceptionally strong" access to the Internet that appeals to trading firms and companies that need data centers. Because the building used to be a warehouse it has large floor plates. "You could take people from seven or eight floors of a multi-story building and put them all on one floor to interact with other people in their company," he says.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
