Slate Office REIT has acquired the office at 120 South LaSalle in downtown Chicago for $155.5 million.
120 South LaSalle is a 656,080-square-foot, 23-story, downtown office building located in the Central Loop of Chicago. The building is anchored by CIBC (AA credit), which occupies 45 percent of the gross leasable area for its U.S. corporate headquarters.
120 South LaSalle is in close proximity to the REIT’s existing asset, 20 South Clark, and provides operating, leasing and marketing synergies.
Year-to-date sales activity is now at 6.7 million square feet, amounting to $2 billion, according to Cushman & Wakefield’s second quarter 2018 report. The $2 billion sold this year is currently 90.5 percent higher than the 10-year average. Sterling Bay was once again the buyer for the largest sale of the quarter, this time acquiring Prudential Plaza for $680 billion from The 601W Cos.
Strong investor demand for high-quality assets, as well as slowly increasing rental rates, are causing the development pipeline to continue to grow. From now until the end of 2020, 6 million square feet will be delivered to the CBD. Approximately 5 million square feet is located within the West Loop, Central Loop, East Loop and River North submarkets. The majority of these assets are being built or redeveloped with at least one anchor tenant instead of going up speculatively. 3.4 million square feet of this new office inventory is being delivered from former industrial or retail buildings, a practice commonly seen in the emerging markets outside of the CBD.
