MEPT Spends $217.5M for Chicago’s 200 W. Madison
- Sep 28, 2011
September 28, 2011
By Nicholas Ziegler, News Editor
At this rate, the sales volumes in Chicago will soon match those of New York. Hot off the heels of the iconic Wrigley Building’s sale, Multi-Employer Property Trust has purchased Chicago’s 45-story 200 W. Madison Ave. from a joint venture that includes Tishman Speyer, Pearlmark Real Estate Advisors L.L.C. and a major U.S. pension plan. Transwestern represented MEPT in the transaction.
The property, a 928,040-square-foot, Class A building, is currently 88 percent leased and holds LEED Silver certification. MEPT acquired it through a subsidiary in an all-cash transaction.
“The vacancy rate in the West Loop has fallen over the last several quarters and demand for office space has been led by companies relocating to and expanding in downtown Chicago,” David Antonelli, executive vice president and MEPT portfolio manager at Bentall Kennedy, said. “We think this trend will continue and benefit office buildings such as 200 West Madison in Chicago’s central business district.” Bentall Kennedy is the real estate advisor to MEPT.
The central Chicago market, including the Loop, has been seeing renewed activity in the office sector. Previous to the Wrigley deal, the second quarter of 2011 saw the sales of 111 W. Jackson, 233 N. Michigan and 200 S. Wacker. “The market heads into the second half of 2011 on modest upswing,” a report by Marcus & Millichap notes, “following an increase in occupied space and stabilizing rents in the second quarter.”
A report by Jones Lang LaSalle had a similar sentiment. “The East Loop building sale [at 233 N. Michigan] is an indicator of what some in the market believe to be a sign that investors will center attention on well-leased, core plus product,” it notes. The city’s healthy capital markets and steady occupancy levels, coupled with the lack of commercial construction, indicate a return to profitability for building and property owners.