In this week’s issue:
- After 5 years, a trophy Chicago tower selling at a loss.
- Plus, we give you the latest properties Under Contract in: Santa Rosa, CA; Bradenton, FL; Chicago, IL; York, ME; Las Vegas, NV; Elizabeth, NJ; New York, NY; Raleigh, NC; Morrisville, PA; Houston, TX; and Renton, WA.
After Five Years, Chicago Trophy Tower Selling at a Loss
By: Andrew C. Burr
Grubb & Ellis Realty Investors is set to deal the 522,000-square-foot Congress Center at 525 W. Van Buren St. in the West Loop in Chicago to Franklin Street Properties Corp. (FSP), a Massachusetts-based REIT, at a price that is steeply discounted from what the building traded for five years ago.
The contract price is $130 million and includes the assumption of $97.5 million in debt, FSP said Friday in a securities filing.
That number is more than $6 million less than the building’s price tag in 2003, when it was purchased by Triple Net Properties, one of the nation’s largest sponsors of securitized 1031 tenant-in-common exchange programs. The property assumed the Grubb name last year following the merger of Grubb & Ellis and NNN Realty Advisors, the umbrella company of Triple Net Properties and several other real estate investment platforms.
The 16-story office tower delivered in 2001 and is at 525 W. Van Buren St. in Chicago’s West Loop, a few blocks from the Sears Tower. It is about 80 percent leased and anchored by North American Company for Life and Health Insurance, Akzo Nobel Polymer Chemicals and several government agencies, according to CoStar information.
The deal is expected to close late this year or earlier next year, according to the filing.
Read Under Contract First
Receive notice when a new Under Contract column is published by receiving The Watch List newsletter. The Watch List is a powerful one-two-combination of both top-down macro analysis and bottom up micro real estate news, as well as valuable leads about companies expanding and contracting and property and loan investment opportunities. It is available for free by e-mail, which is the quickest way to review all of the news in the column as soon as it is published and link directly to the news and features you want. Just e-mail me your name, title, company, company business, city, state, and e-mail address. You can reach me by clicking on the byline above or e-mailing me at Mark Heschmeyer
Under Contract
Health Care REIT Inc. terminated its previously announced agreement with an affiliate of Arcapita Inc. to acquire the affiliate's 90% interest in a venture owning 29 senior housing properties managed by Sunrise Senior Living Inc. "We performed extensive due diligence and appreciate the cooperation and assistance provided by Sunrise and Arcapita," said George L. Chapman, chairman and CEO of Health Care REIT. "Given the uncertainty in the capital markets, we determined the transaction would not be in the best interests of our stockholders under the original terms. We will continue to pursue new investment opportunities in the senior housing and care industry, and are committed to prudently allocating capital throughout all economic cycles."
AIMCO affiliate Consolidated Capital Institutional Properties LP agreed to sell The Loft Apartments, a 184-unit apartment complex in Raleigh, NC, to The Embassy Group LLC, a New York limited liability company, for $10 million. Separately, AIMCO's Consolidated Capital Growth Fund agreed to sell The Lakes Apartments, a 600-unit apartment complex in Raleigh to The Embassy Group LLC for $26 million. The deals are to close by Dec. 12.
Material Sciences Corp. agreed to sell its 136,000-square-foot coil coating manufacturing facility in Morrisville, PA, at 120 Enterprise Ave. to K. Matkem of Morrisville LP. The purchase price of $4.6 million for the real estate is subject to adjustment for real estate taxes, utility charges and assessments for municipal improvements. Select equipment, supplies and inventory in the property will be sold to Brightsmith, LLC, a Delaware limited liability company, for $4.5 million. Brightsmith may also buy inventory and supplies, which it selects after the closing and is estimated to be worth $1.5 million. The sale of the real estate is currently scheduled to close around the first of December.
The following properties were reported in the past week to CoStar Group as pending or coming under contract.
| Property | Property Type | Size(SF) | Days on Mkt | Asking Price | Listing Broker | | 144115 Arbor Green Trail, Bradenton, FL | Retail | 14,820 | 3 | $6,875,000 | The Paradise Developm… | | United Jersey Bank, 288 N. Broad St., Elizabeth, NJ | Office | 28,910 | 46 | $5,250,000 | Marcus & Millichap | | 1600 Ruiz St., Houston, TX | Industrial | 112,500 | 227 | $5,312,500 | James H. Byrd | | 2231 W. Charleston Blvd., Las Vegas, NV | Health Care | 17,874 | 43 | $7,400,000 | Marcus & Millichap | | Hunter College School of Social Work, 127-129 E. 79th St., New York, NY | Specialty | 110,000 | 3 | $65,000,000 | Saml J Silberman Fund… | | The 500 Bldg, 440-500 SW 7th St., Renton, WA | Office | 64,444 | 220 | $11,150,000 | John C. Radovich Devel… | | Pioneer 2000 Apartments, 2000-2010 Pioneer Way, Santa Rosa, CA | Multifamily | 126,340 | 346 | $24,500,000 | Premier Apartment Advi… | | Rite Aid, 14 Cider Hill Road, York, ME | Retail | 14,680 | 110 | $6,155,720 | Marcus & Millichap |
|