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February 1, 2013

MEPT Obtains $105M Mortgage for Chicago’s 200 W. Madison

By Gail Kalinoski, Contributing Editor

More than a year after paying $217.5 million in cash for 200 W. Madison, a Class A office tower in Chicago’s West Loop, Multi-Employer Property Trust has taken out a $105 million mortgage on the 928,040-square-foot property.

Prudential Mortgage Capital Co. provided the 10-year, fixed-rate loan for MEPT, which acquired 200 W. Madison in September 2011 from a joint venture of Tishman Speyer, Pearlmark Real Estate Advisors L.L.C. and a major U.S. pension plan.

Dave Hendrickson and Keith Largay of Jones Lang LaSalle Inc.’s Chicago office arranged the transaction. Sarah Teunis, a director with Prudential Mortgage Capital’s New York City office, partnered with Bryan McDonnell, a principal with its Arlington, Va., office, on the deal. Bentall Kennedy is MEPT’s real estate advisor.

“This building’s quality and central location, combined with the quality of the sponsorship, made this transaction extremely attractive,” Teunis said in a statement.

Built in 1983, the 45-story tower has been significantly renovated over the years and is now LEED Silver and Energy Star certified. It is located on the eastern border of the West Loop, near highways and commuter transportation lines and a short walk to the Ogilvie Transportation Center and Union Station. The building has a three-story glass atrium and a saw tooth façade that allows as many as eight corner offices or conference rooms per floor. Floor-to-ceiling glass perimeters allow for unobstructed views from the east and south sides.

When MEPT purchased the property, it was 88 percent leased, with a mix of tenants including law firms and financial services groups. MEPT said in a release then that it planned on being a long-term owner and would seek to attract more high-quality tenants. Transwestern, which has its Chicago and Midwest regional headquarters in the building, was named the leasing and management agent for the property shortly after the acquisition.

More recently, MEPT and Bentall Kennedy acquired 475 Sansome, a 21-story, 353,269-square-foot office tower in San Francisco, for an undisclosed amount. The acquisition, announced in December, fits the Washington, D.C.-based trust’s criteria for high-end office properties located in CBDs of major U.S. cities. The fund is also seeking to invest in grocery-anchored retail centers and multi-family properties.

Prudential Mortgage Capital is a national, full-service commercial and multi-family mortgage finance business with more than $72.7 billion in assets under management and administration as of Sept., 30, 2012. Based in Newark, N.J., it recently provided an $85 million, 15-year fixed-rate loan to MD Carlisle and JD Carlisle for Kips Bay Plaza, a 171,325-square-foot, grocery-anchored retail center in the Kips Bay section of Manhattan. Located on Second Avenue between 30th and 32nd streets, the property recently added a Fairway Supermarket. Other tenants include an AMC movie theater, Rite Aid, Petco, Staples and TD Bank.