CBRE Global Investors to sell Chicago office for $400m
CBRE Global Investors has hired the Chicago office of HFF to sell the 1.1 million-square-foot tower at 161 N. Clark St. in Chicago, according to Crain’s. The sales price is expected to be around $400 million.
CBRE Global Investors’ U.S. Managed Accounts Group purchased the 49-story office tower in 2013, on behalf of a consortium of Korean investors led by Korea Post. The seller was Tishman Speyer. At the time of the sale, the U.S. Managed Accounts team planned to implement a $14 million capital campaign to upgrade existing amenities and building systems and to maintain the property’s existing LEED Silver Certification.
For the second straight year, the central business district of the Chicago office market began with a large positive absorption total, according to CBRE. The market experienced positive absorption of 313,415 square feet in the first quarter.
And approximately 5 million square feet of shadow space will hit the market over the next two years in the Chicago CBD. Additionally, 1.1 million square feet of sublease shadow space is anticipated to come online during the same period.
This represents approximately 4.6 percent of the total office inventory. Out of the 6.1 million square feet of total shadow space, 67 percent of the shadow space is class A product and 60 percent is located in the West Loop.
Closing out a fourth consecutive year well above historical averages, the momentum continues for the CBD investment market. Three assets sold during first quarter 2017 totaling $400 million, with another asset and two portfolio sales currently under contract. The most notable transaction under contract is 125 S. Wacker at a price of $252 per square foot. All closed transactions in 2017 have been value-add in profile, illustrating investors’ continued bullish stance on leasing existing vacancy and pushing rental rates. The recent additions of 2.3 million square feet to the inventory plus another 1.6 million square feet under construction have not deterred the investment market’s belief in a continuation of the large net absorption totals compiled over past two years.