CHICAGO-Affiliates of Harbor Group International LLC have closed on the acquisition of the 40-story, 1.2-million-square-foot One South Wacker office building here for $221 million. The seller is TIAA-CREFF, according to market sources. The selling price had been originally reported as just under the $230 million.
Israeli insurance firm Clal Insurance Co. is Harbor's largest investment partner. Other investors include affiliates of New York-based Image Capital LLC. Eastdil Secured served as the seller's broker for the building, located at the intersection of Madison Street and Wacker Drive in the prestigious West Loop area.
“One South Wacker is a premier asset in a premier location,” explains T. Richard Litton Jr., President of Harbor Group International.
According to published reports, TIAA-CREF bought the property in 2002 for $209 million. "Crain's Chicago Business" reported TIAA-CREF placed the property on the block in 2008, just before the market drop, looking to get from $225 million to $250 million for the asset. The building is 80% leased and has more than 40 office and retail tenants.
Harbor says it will implement a capital improvement program to create an entry atrium winter garden and provide other needed renovations. “We plan to focus our improvements on tenant retention and attracting new tenant interest from the desirable West Loop submarket," Litton says. He tells GlobeSt.com that Harbor sees a lot of upside potential to the property and plans to do further leasing.
Harbor owns three other buildings in downtown Chicago: 300 South Wacker, a 512,500-square-foot office tower; 111 West Washington, a 580,000-square-foot office tower; and 2 North LaSalle, a 715,000-square-foot office tower. Media reports said Harbor paid $323.7 million for those properties.
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