CHICAGO—The financial services company Wolverine Trading LLC has just extended its lease agreement at 175 W. Jackson Blvd., totaling 87,978-square-feet, and the deal could illustrate a more concentrated effort by many CBD landlords to build up their properties' values.
“In the last 18 months, we've seen one of the most active sales cycles ever,” Robert Sevim, executive managing director of Savills Studley, tells GlobeSt.com. He co-brokered the transaction with David Stein of Steinco Inc., both representing Wolverine. Sean Murphy of JMIC Corp. represented the landlord. “And because it's such a frothy market, we're seeing a lot of focus from building owners on adding value.” And being accommodating to solid tenants, and making sure to lock them into long-term extensions, is certainly part of the strategy, even if, as appears to be the case at 175 W. Jackson, owners are not currently looking to sell.
KBS REIT III recently acquired 500 W. Madison for about $425 million. And 300 N. LaSalle just sold for about $850 million, the highest price ever paid for a Chicago office building.
Although Sevim could not divulge any details about the new lease, he did call it “long-term,” and that it “allows Wolverine both cost savings and the opportunity to modify their existing conditions should the need arise in the future.”
“No matter how we sliced it, moving would not have proved a better solution,” he adds. Wolverine has been in the building since the 1990s, occupying the second floor and part of the third, and in the end decided “why not take what we have and enhance it?”
As a trading firm, Wolverine is heavily dependent on technology and infrastructure, and needs an owner with the financial wherewithal to update a building if needed. This is the first sizeable transaction for the building since it was refinanced in late 2013, according to Stein, but even before that, the building had a solid financial reputation.
“Regarding it from that perspective, we certainly have a high level of comfort,” Sevim says. “This is a building we are not concerned about.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
