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Beacon Capital Grabs Another Loop Office Tower: 303 E. Wacker

Franklin Street Properties Sells 28-Story Building for $182 Million
July 3, 2018
It looks like Franklin Street Properties found a buyer in Beacon Capital Partners for the 28-story office tower it has been trying to sell for some time at the Illinois Center complex.

FSP 303 East Wacker Drive LLC, Franklin Street’s investment vehicle, inked a $182 million purchase pact with BCSP 8 Acquisition LLC, a.k.a. Beacon Capital, for the high-rise at 303 East Wacker Drive, according to a filing with the Securities and Exchange Commission.

The purchase is contingent upon Beacon Capital’s shareholder approval, but is expected to close on or about Sept. 4, according to the filing. Representatives for either company were not available for comment.

Franklin Street first put the 859,187-square-foot tower on the market in 2016 with HFF before listing it again, this time with Jones Lang LaSalle as the listing broker, this past April. The building took a big hit in 2012 when Groupon and KMPG moved out. That left a stinging 56 percent vacancy in an aged building at a time when leasing activity was what Franklin Street Chief Executive George Carter called "increasingly fierce" in an Aug. 11, 2016, letter to his shareholders. Franklin Street bought the property in early 2007 for $167 million, according to CoStar research.

The 39-year-old building at 303 E. Wacker is in a prime location and has undergone a bevy of renovations, a number of them - such as a conference center and tenant lounge - under Franklin Street’s tutelage. It’s considered a 4-Star property, according to CoStar research.
The site also has 294 underground parking spaces, is adjacent to 400,000 square feet of pedestrian shopping, dining and fitness activities, and is accessible to the underground pedway system that directly links to the Randolph Street "L" Station, City Hall and the court system. It also has enclosed walkways to the Fairmont, Swissotel and Hyatt Regency hotels.

Plus, it’s got a relatively new tenant in Tribune Media, which moved into nearly 61,000 square feet when it relocated from the Tribune Tower last summer. The largest tenant is Maximus Inc., the largest provider of administrative services for government health programs, which runs a call center out of its 61,000 square feet. The building is now 72 percent occupied.

Beacon Capital is hardly a newcomer to Chicago or to rejuvenating older buildings. The Boston-based real estate investment firm has put its touch on the 101-year-old 1 N. Dearborn, the 1 million-square-foot 231 S. LaSalle and the Chicago landmarked 330 N. Wabash -- all in key downtown Loop locations that have been substantially rehabbed with modern amenities and updates.

Last summer it sold 300 S. Wacker for $155 million to Golub & Co. The building is a favorite among architecture docents leading Chicago River tours because of its jaw-dropping exterior that features a grid map of downtown Chicago that spans the building’s 35 floors on the riverside's sheer wall.

Jennifer Waters, Chicago Reporter  CoStar Group   

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