Madison Capital Looking For Quick Cashout On Sullivan Center

Madison Capital and KKR are seeking buyers to take the office portion of the landmark Sullivan Center.

The JV hired JLL to market the space nearly a year after it bought the entire building in a complicated $267M deal. If Madison Capital can get the $200M ask it is seeking, it will be a 30% return on investment on what the JV paid for the property, Crain's Chicago Business reports.

Madison Capital sold Sullivan Center's retail component, which is home to a Target, to Acadia Realty Trust for $147M last August. Being able to sell Sullivan Center's retail and office portions separately would have been unheard of a few years ago. Elad Canada, the building's previous owners, used tax credits for its repositioning, which prevented an owner from maximizing a return by separating the office and retail for separate sales. Elad Canada waived that provision, which paved the way for the Madison Capital-KKR acquisition.

Sullivan Center's office component comprises 830K SF and is 96% occupied. Anchor tenants include the Illinois Department of Employment Security (243K SF) and the e-commerce unit of Walgreens (194k SF). Madison Capital and KKR leveraged the acquisition with a $207M loan, meaning the JV could double its investment in just over a year.

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