Foreign Capital’s Sweet On Chicago Office
Maybe its our Midwestern charm or Midwestern portions at restaurants, but international investors can’t get enough of our skyscrapers. We’ll see you tomorrow, at the CBOT Building, to discuss further during our special Office Summit.
For example, Zeller Realty Group (ZRG) recently picked up 1.3M SF 311 S Wacker Dr in a JV with Chinese investment manager Cindat Capital Management. CIO and principal Ari Glass (an event panelist, snapped with his oldest) tells us ZRG has bid on other properties with Israeli institutional capital as a potential partner, and the market is seeing sustained interest from Korean, Japanese, and Canadian investment capital. (We should've taken language classes in college instead of that course on fashion choices in medieval British poetry.) Foreign investors have migrated to the large and liquid Chicago market as the coasts become pricier, Ari says. And this is good news for a veteran local player like ZRG. While some foreign buyers prefer to buy on their own and use third-party leasing and management, most prefer a local operator like ZRG to chase down deals and execute, he says.
ZRG generally looks for value-add assets, but 311 S Wacker was a unique $300M Class-A deal. When CBRE vacates, the building will go down to about 79% occupancy (meaning there's some leasing upside), but it will remain well leased enough to be a cash-flowing asset, Ari tells us. Over at the Wrigley Building (above), which ZRG has been part owner of since September 2011, Walgreen’s on target to open in early July and leasing has jumped from below 20% to 50% since ZRG revealed the building’s major makeover last July. Ari’s family has been enthralled with the Blackhawks playoff run, and his three kids (6,8,11) suit up to watch games on TV and insist on sleeping in their Hawks gear. (Don’t stop, kids, that’s why they keep winning.) Get your event tix here.
