CHICAGO-A joint venture of local investors David Werner, Jacob Gerstein and Victor Gerstein has closed the sale of the 1.6-million-square-foot 600 W. Chicago here in River North. The Newton, MA-based CommonWealth REIT purchased the site, which includes the headquarters of Groupon, for $390 million.
As some large towers have taken losses since the recession, the tower benefitted from both a multi-million dollar refit in 2001 and Groupon’s success as one of the top Internet companies in the past few years. The investor owners had purchased the complex in May 2007 for $289 million.
The building is 98% leased, according to HFF, which marketed the property on behalf of the seller. Groupon recently expanded to 220,000 after taking over space left by Bankers Life and Casualty, which moved to the East Loop. Other tenants include Level 3 Communications Inc., Wrigley (now owned by Mars Inc.) and Fox Sports.
The eight-story complex was originally built as a distribution center for Montgomery Ward in 1908 and is designated a historic property. The building is located within Kingsbury Park along the Chicago River, near where the infamous Cabrini Green apartment towers once stood.
Jamie Fink with HFF tells GlobeSt.com that the buyer assumed existing financing, which had been arranged by HFF in 2007. His firm had also arranged $180 million in financing for the previous owners in 2005. He says it’s clear that Chicago is one of the core cities where investors are looking to buy successful office towers.
“Just look at 55 W. Monroe under contract for $140 million, Irvine’s interest in One N. Wacker (for about $617 million) and Korea Teachers (Credit Union) taking Three First National for $349 million,” Fink says. “There’s strong opportunity here.”
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.
