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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