CHICAGO-The Hearn Co. has closed the purchase of the 40-story 55 W. Monroe office here for $136 million. LaSalle Investment Management, a division of Jones Lang LaSalle, sold the property, formerly known as the Xerox Center.
Sources say the building is about 75% leased, with tenants including Troutman & Sanders and the Financial Industry Regulatory Authority. LaSalle purchased the 803,000-square-foot building in August 2003 for $92 million. Helmut Jahn designed the building in 1980.
Stephen Hearn, president and CEO of the self-named local firm, said in a statement that he is ready to start reinvesting in Chicago property again, especially after the current lack of new construction has started to open opportunities for large space holders. The downtown Chicago market currently has about three million square feet of class A large block space available, according to a fourth quarter MB Real Estate office report, and about 43 tenants seeking 50,000 square feet or more.
Formed in 1974, the Hearn Co. had owned buildings such as 230 N. Michigan, 67 E. Madison and 209 W. Jackson in the 1980s. “After a considerable amount of investing in the West and Southwest over the past decade, this acquisition gives us the ability to return home to this great city and recapitalize an iconic downtown Chicago asset,” Hearn said.
He started the purchase of the property this past summer, but said it was a challenge to navigate choppy capital markets in July and August. In the sale, JLL arranged acquisition financing of $86.5 million in senior debt through Wells Fargo Bank, and $21.5 million in a mezzanine facility through Redwood Commercial Mortgage Corp.
The Hearn Co. will embark on a renovation program that will change the entryways, amenities and common areas. The firm will manage, construct and oversee the leasing and marketing program, with about five full floors available and up to 50,000 contiguous square feet.
Bruce Miller, Jim Postweiler and David Hendrickson led the transaction for JLL. “The Chicago market continues to show strong recovery,” Miller said in the statement. He did not offer a comment on why the company sold the site.
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