Top 10 Downtown Chicago Office Sales Of 2015
Chicagoans closed out 2015 with some of the warmest year-end temperatures in recent memory, and we have to wonder whether the blazing-hot office market has anything to do with it. With $6.2B in sales, 2015 witnessed the highest levels of office investment dollars (ever), smashing the previous $5.3B record set in 2006. Here are the 10 largest deals of 2015, thanks in part to our friends at CoStar:
10. 1 N Dearborn
Buyer: Beacon Capital Partners
Seller: Chetrit Group
It was a busy 2015 for Boston-based Beacon Capital Partners, which acquired 1 N Dearborn shortly after Chicago Public Schools commenced a 15-year, 182k SF lease in what would become a highly publicized transaction. The firm also acquired the 29-story office tower at 515 N State for $138M, and sold off the 38-story office tower at 180 N LaSalle.
9. 111 N Canal
Buyer: JP Morgan Chase
Seller: Sterling Bay
Sterling Bay is known for repositioning vintage buildings into tech-friendly office lofts, and true to form, it strung together long-term deals at River Center with tech giants Gogo, Twitter, Fieldglass and Uber and upgraded the property with a new lobby, rooftop deck and fitness center. The result: Sterling Bay sold the 830k SF asset for a threefold increase from what it paid in late 2012.
8. 115 S LaSalle & 111 W Monroe
Buyer: Samsung Life Insurance
Seller: CommonWealth Partners
Samsung Life Insurance moved quickly to pick up the 115 S LaSalle and 111 W Monroe portfolio, which was on the market for just 20 days. Over the last decade, the two properties have undergone roughly $40M in renovations. Home to the BMO Harris US HQ (which owned the property before a 2005 sale-leaseback to CommonWealth) the bank leases 755k SF between the two towers, or roughly 63% of total RBA, through 2025.
7. 333 W Wacker
Buyer: PNC Realty Investors
Towering over the Chicago River branch with its signature rounded green-glass façade, this 36-story property had been held by Hines since its acquisition in 2006 for $219M. Anchor tenant Nuveen Investments leases approximately 170k SF through 2025; other prominent occupants include consulting firm FGMK, law firm Kelley Drye and Environ Holdings.
6. One South Wacker
Buyer: John Hancock Real Estate
Seller: Harbor Group
Harbor Group acquired One South Wacker for $221M in 2012 and implemented broad renovations, including the lobby, common corridors and adding an atrium winter garden. With upgrades in place, Harbor Group sold to John Hancock Real Estate (the US division of Manulife Financial) in an all-cash, $344M deal.
5. 55 E Monroe
Buyer: Prudential Real Estate Investors
Seller: Walton Street Capital
After extensive renovations in 2013, and going under contract in late 2014, the January sale of 55 E Monroe set the tone for what would become a record-breaking 2015. The deal included both office and retail portions of the building and a seven-story parking garage, but not the residential condos on the top 10 floors.
4. 233 N Michigan & 111 E Wacker
Buyer: AmTrust Realty
Seller: Equity Commonwealth
Equity Commonwealth sold off the Illinois Center portfolio, which included 233 N Michigan and 111 E Wacker. Citigroup Global Markets Realty Group financed the deal with a 10-year, $260M loan. Selling for just $185/SF (the lowest price/SF on our list), and at 73.5% occupancy between the two properties, this deal represents one of the year’s most significant value-add plays.
3. 350 N Orleans
Buyer: Blackstone Group
Broker: Shorenstein Properties
With its killer location and proximity to the booming River North submarket, Blackstone jumped at the opportunity to acquire River North Point for $378M. A testament to this year’s ravenous investor appetite, the 38-year-old property was on the market for only two months before being placed under contract.
2. 200 E Randolph
Buyer: 601W Cos
At 83 stories, Chicago's trophy tower, the Aon Center, snatches second place on our list. NYC-based 601W Cos picked up 200 E Randolph for a cool $264/SF. No stranger to the block, 601W Cos also owns a large interest right across the street at Prudential Plaza.
1. 233 S Wacker
Buyer: Blackstone Group
Seller: The Feil Organization
In a milestone year of office sales, it’s only appropriate Chicago’s most iconic office tower nabs the top spot, not to mention setting a record of its very own: the $1.3B price tag surpasses any office building (outside of New York City) since 300 N LaSalle sold for $850M in 2014. Over the next few years, Blackstone plans to invest in several upgrades to the building, including the world-renowned Skydeck Chicago, as well as developing a fresh retail space along the West Jackson Boulevard side of the property.