CHICAGO-It’s been a better year for the owners of the former IBM Building. Locally based Prime Group Realty Trust announced Wednesday night that it has signed another big tenant, with SmithBucklin Corp. agreeing to move its headquarters office to about 111,081 square feet at 330 N. Wabash in the River North area downtown.
The professional services firm has about 500 employees currently in 107,500 square feet at 401 N. Michigan Ave. The firm has leased at the 35-story building since 1990, and had signed a 10-year expansion in 2007 after a previous search for other space. A spokesman for the company tells GlobeSt.com that details on the lease are still being finalized, and he cannot comment further.
With the SmithBucklin 15-year lease, the office portion of 330 N. Wabash will be 75% occupied, a much better scenario for the building that was about half-empty after Jenner & Block moved out two years ago. A 320-room Langham Chicago Hotel is set to open on floors two through 13 in the second quarter of 2013.
Earlier this month, Prime Group announced its major coup for the building, as the American Medical Association said it will take a 300,000-square-foot anchor spot in the 52-story tower. The building will be renamed the AMA Plaza when the organization moves into a 15-year lease starting in 2013.
Jeff Patterson, Prime Group president and CEO, said in a statement Wednesday that more than $25 million in renovations equipped the building with modern amenities, drawing in more tenant interest.
Steve Baron, an EVP with Prime Group, represented the building in the lease. Howard Ecker with Howard Ecker + Co. represented SmithBucklin.
Affiliates of both Prime Group and Five Mile Capital Partners LLC have a joint venture that owns, manages and operates 330 N. Wabash. Earlier this year, the venture entered into amendments to its financing documents with the existing lenders at the property providing, among other things, the pay down of $20 million of principal and the additional reduction of the principal by $20 million, the extension of the maturity date to Jan. 31, 2016, (the reduction of the loan commitment to $128 million (of which $30 million remains available to be drawn for tenant improvement, building redevelopment and other costs) and providing certain additional contingent interest to the lenders not to exceed $20 million. Five Mile also provided up to $75 million of additional capital to the joint venture.
Complicating matters is that Five Mile is engaged in an acquisition of Prime Group. The Stamford, CT-based Five Mile had offered $20 million, or $5 per share for Prime Group’s four million outstanding shares, but the Prime Group board rejected this offer. Five Mile is now offering $5.25 per share.
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