Slate Office REIT CEO Scott Antoniak said his firm's $86M acquisition of 20 South Clark in January was the start of a U.S. expansion. The Toronto-based firm made good on that promise in Chicago, acquiring 120 South LaSalle for $156M, Crain's Chicago Business reports.

The seller, a joint venture of Lincoln Property Co. and the Illinois Teachers' Retirement System, listed the building in April. It paid $121M for the 23-story tower in 2006. The anchor tenant is CIBC, which leases 45% of the building's 650K SF.

Antoniak declared Chicago to be a key U.S. market in Slate Office's expansion, even as competition is heating up from investors and new buildings like 151 North Franklin and 625 West Adams are adding footprint to the central business district's inventory. The Canadian real estate market is in the middle of a record-setting three-year bull run, and investors to the north are willing to deploy capital in the much larger U.S. market because the risk returns are compelling. Antoniak said Slate Office looks to leverage symmetries in markets where its retail REIT is successful.

As with 20 South Clark, there is room to increase yield at 120 South LaSalle. Even with CIBC taking up a large chunk of space, the building has a 19% vacancy rate. CBRE's Cody Huntermark, Tom Sitz and Blake Johnson represented the sellers in the deal.

This is the latest nine-figure transaction in what is shaping up to be a bounceback year for downtown Chicago office sales, after a two-year dip. Office sales in the first half of 2018 totaled $3.3B, compared to $3.1B for all of 2017.