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Groupon's HQ Bldg. at 600 W. Chicago Goes Under Contract for $510 Million

Equity Commonwealth Enters Agreement to Sell River North Complex to Sterling Bay One Month After Going Under Contract to Sell 1600 Market in Philly
January 24, 2018
Less than four months after putting the property on the market, Equity Commonwealth (NYSE: EQC) is under contract to sell Groupon's world headquarters building in the firm's home city of Chicago for $510 million, continuing a massive sell-off of the company's U.S. portfolio.

Local reports and The Wall Street Journal have pinned the buyer as local investor and developer Sterling Bay Cos., which will pay roughly $325 per square foot for the 1.571 million-square-foot, eight-story 600 West Chicago building located at the northwest corner of Chicago Ave. and Larabee St. in River North. The sale is expected to close by March 23.

Acquired by Equity Commonwealth in 2011 for $390 million, the former Montgomery Ward catalog building is currently 98.4% leased to Vantage Boat Share, Level 3 Communications, Echo Global Logistics, Dyson and Groupon, which relocated its corporate offices from the East Loop to 600 West Chicago in 2012.

Equity Commonwealth, the commercial office REIT led by American billionaire businessman Sam Zell and CEO David Helfand, hired Eastdil Secured back in October to seek buyers for 600 West Chicago, with Steve Livaditis heading up marketing efforts.

According to a company press release, proceeds after credits for capital costs, contractual lease costs, and rent abatements are expected to be approximately $487 million.

The pending sale is the latest major divestment Equity Commonwealth has lined up for this quarter after going under contract in December to sell 1600 Market St., an 825,968-square-foot, 40-story tower in downtown Philadelphia anchored by PNC Bank. That sale is scheduled to close by February 28 for a gross sales price of $160 million.

By the quarter ended December 31, 2017, Equity Commonwealth had sold the Cherrington Corporate Center and Foster Plaza in Pittsburgh for $71 million; 789 Eisenhower in Ann Arbor, MI for $24.9 million; and a vacant 175,000-square-foot industrial building in North Haven, CT for $10.5 million. With the completion of its two pending deals, Equity Commonwealth will have grossed roughly $775 million in proceeds over the last two quarters.
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