Midwest Office Portfolio Commands $417M

The acquisition is the largest in Hertz Investment Group’s history.

By Keith Loria, Contributing Editor

Salesforce Tower, Indianapolis
Salesforce Tower, Indianapolis

ChicagoHertz Investment Group has acquired a four-property office portfolio totaling 3.1 million square feet from Equity Commonwealth for $416.9 million.

“One of Hertz’ primary growth strategies has been to acquire best-of-class office buildings in the central business districts of midsize markets, and we feel very fortunate to include four such properties in one deal,” Judah Hertz, Hertz founder & chairman, said in a prepared release. “What’s critical is that we remained true to our acquisition strategy and followed our sound financial objectives.”

The acquisition, the largest in Hertz’ history, included the 19-floor North Point, an 878,000-square-foot office complex at 901 Lakeside Ave. in Cleveland, which is currently 78 percent occupied; and the 37-story, 100 E. Wisconsin in Milwaukee, which overlooks the Milwaukee River. The 435,629-square-foot building was 88 percent leased at the time of the sale to a tenant roster that includes Michael Best & Friedrich, Wells Fargo and the Marcus Corp.

Two Indianapolis properties were also included in the sale. The PNC Center, a 650,000-square-foot Class A office building at 101-115 W. Washington St.; and the 48-story, 1 million-square-foot former Chase Tower (recently renamed the Salesforce Tower) at 111 Monument Circle.

With the acquisition, Hertz’s portfolio now consists of 21.7 million square feet of office space in 22 cities and 17 states.

Last month, Equity Commonwealth completed the sale of a 121,901-square-foot office property at 8701 N. Mopac in Austin, Texas, for $21.5 million and year to date, has sold $1.1 billion of assets, inclusive of 27 properties and 7.2 million square feet. The company’s portfolio now consists of 38 properties and 16.9 million square feet.

Image courtesy of Salesforce