Ivanhoé Cambridge Grabs Premier 1.4 MSF Office Property for $360M
- Nov 21, 2013
Ivanhoé Cambridge’s presence in Chicago just grew by a whopping 1.4 million square feet. In a partnership with Callahan Capital Properties, the real estate company acquired 10 and 120 South Riverside Plaza, twin 21-story office towers located smack dab in the Windy City’s central business district, from TIER REIT Inc. for $360 million.
Well-leased and location, location, location. The Class A buildings boast an occupancy level of roughly 90 percent and span two city blocks along the river in the coveted West Loop submarket. Tapped to market the property by TIER REIT, real estate and capital markets services provider HFF found a buying audience that was more than receptive.
“There was a great deal of interest; we received an offer from nearly every group that we talked to during a very limited marketing effort,” Jeff Bramson, senior managing director with HFF, told Commercial Property Executive. Bramson, along with HFF senior managing director Jaime Fink and managing director Mark Katz, spearheaded the team that represented the seller.
Designed by the celebrated architectural firm of Skidmore, Owings & Merrill in 1966, 10 and 120 South Riverside Plaza last changed hands six years ago to the month, when TIER REIT, in its previous incarnation as Behringer Harvard REIT I Inc., picked up the buildings in a three-property office portfolio acquisition. Ivanhoé’s acquisition of the buildings dovetails splendidly with the company’s Chicago expansion endeavor. In May 2012, Ivanhoé announce its investment of $300 million in River Point, a 1 million-square-foot, 45-story skyscraper under development in the West Loop by co-investor Hines.
But the trade of 10 and 120 South Riverside is not only reflective of Ivanhoé’s growth strategy; it has a broader meaning. “What the transaction says is the market is very liquid,” Bramson said. “There are a lot of buyers, a lot of capital that’s looking for well-leased, good quality office properties in Chicago. Investors are looking for yield and there seems to be a good cross-section who look in Chicago for that yield.”
It’s not New York, it’s not San Francisco, but Chicago’s got something every big city wants these days, something that makes all the difference in an office market’s future. “Chicago has four-and-a-half million jobs in our MSA, so it’s a big market, Bramson noted. “And jobs are what is driving the demand for office space in Chicago. Supply has been kept in check so fundamentals are strong right now.”