CHICAGO-Parkway Properties Inc., based in Jackson, MS, announced late Thursday that it has a contract to sell the 32-story 111 E. Wacker Dr. office tower here for $150.6 million. The seller did not identify the buyer.
The one-million-square-foot tower is 94.8% occupied by tenants such as Bankers Life & Casualty Co., an insurance firm that recently leased 134,724 square feet. The tower was designed by Mies van der Rohe and opened in 1970, and had a renovation in 1997. The typical floor size is 33,500 square feet to 34,500 square feet, and the asking rent is $15 per square foot.
Parkway said in a statement that the property currently serves as collateral for a $148.5 million non-recourse mortgage loan with a fixed interest rate of 6.3% and a maturity date of July 2016. The buyer will assume the mortgage loan, and take delivery in the fourth quarter, according to the statement.
Steven Rogers, president and CEO of Parkway, said in the statement that the sale of the property will remove the single largest mortgage loan from the firm’s balance sheet, significantly reducing leverage. Also, approximately one third of the square footage at the building is expected to be vacated over the next 12 months, though these expirations have been partially backfilled with the Bankers Life lease, Rogers said. “Given the required re-leasing of the property, this sale should result in meaningful capital cost savings over the next couple of years,” he said.
The company recently sold the adjacent 1.1-million-square-foot 233 N. Michigan office building, 84% occupied, to CommonWealth REIT for $162 million. Parkway will still have a Chicago presence of about 815,000 square feet in two buildings, Chatham Centre in Schaumburg, IL and US Cellular Plaza near O’Hare International Airport in the city.
Parkway, a self-administered REIT, owns or has an interest in 67 office properties in 12 states. The company leasing representative for the property did not return a request for comment for this story.
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