Chicago “trophy” building closes sale

A prime office space recently sold in Chicago.

A leading provider of commercial real estate and capital markets services is calling its most recent property sale a Chicago "trophy office."

HFF, with offices in 22 cities nationwide, closed the sale for 500 West Madison St., a 40-story, 1.46 million-square-foot office located in Chicago's central business district.

"500 West Madison is the most well-located office building in the entire Chicago central business district office market and the property's heavily trafficked first two floors create an exceptionally rare and valuable retailing environment that cannot be replicated," said HFF senior managing director Jaime Fink.

Fink, along with fellow senior managing director Jeff Bramson and managing director Mark Katz, represented the seller GE Asset Management and UST XV Madison.

KBS Real Estate Investment Trust III purchased the property for $425 million. HFF also worked for the borrower to help land the $255 million fixed-rate loan through Wells Fargo Bank. According to HFF, the deal for the 40-story building represents the first time it has been offered for 100 percent sale since constructed concluded in 1987.

"The debt community responded very aggressively to this offering given the exceptional sponsorship, low leverage structure, and the asset's skyline defining prominence and irreplaceable location," Michael Kavanau said.

What the "trophy" building has to offer
The 500 West Madison property is one of Chicago's Class A, LEED Gold-certified buildings, meaning that the facility was constructed and designed to be green and to run efficiently. In order to earn LEED Gold status, a building must gain a certain amount of points from a rating system. Those categories put emphases on water efficiency, indoor environmental standards, sustainable building materials, a reduction in waste and a smart location with efficient design to public transit.

With the Ogilvie Transportation Center directly below it, the facility features 55 parking spaces and two floors of retail space connected to the transportation center. The office space is at a prime location within close proximity to Chicago Transit Authority buses and trains, as well as Interstate 90/94.

"This was a once in a generation opportunity to acquire an A+ trophy asset that houses the concourse of one of the busiest commuter train stations in the country," Bramson said. "Nationally, comparable assets are seldom put on the open market."

The office space is the global headquarters to Orbit Worldwide, Acquity Group and LKQ Corporation, and the building is currently 92.7 percent leased.

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