Two High Profile Office Space Towers Will Go to Highest Bidder
Two premier Chicago office towers, Three First National Plaza and 233 N. Michigan Avenue, are currently up for sale, as investors’ excitement grows over the ever-improving office space market.
Chicago office towers Three First National Plaza and a building in Illinois Center are on the market as landlords drool over the chance to get a taste of the increasingly improving investment market. A joint venture led by Hines Real Estate Investment Trust Inc. has put Three First up for sale.
Sources say this is a 1.4-million-square foot skyscraper at 70 W. Madison Street, built in 1981 with about 91% leased. The building is predicted to possibly sell for more than $340 million.
Three First could potentially sell for $340 million, according to industry newsletter Real Estate Alert. By one estimate, the price could reach $380 million. A joint venture that includes the Hines real estate investment trust, a Hines fund and a Japanese life insurance company paid $245.3 million for the 57-story tower in 2005.
In an unrelated move, sources also say that Parkway Properties Inc. has listed 233 N. Michigan Avenue, a 1.1-million-square-foot tower in the Illinois Center complex. Built in 1972, and 85% leased, the building may sell for $190 million. Marketing commences amid a nation-wide surge in investor interest in downtown properties which so far has largely been confined to trophy assets.
If the sales efforts are successful, it will indicate that investors are betting on the continued recovery of the economy as they begin to expand their horizons, willing to acquire older but high-quality assets.
At the other end of the office space spectrum, a partnership led by North Shore investor Richard Colburn has put 111 W. Jackson Blvd up for sale, in an 11-hour bid to avoid foreclosure. This half-vacant 540,000-square-foot structure is likely to sell for less than the outstanding debt of $23.4 million, could test investor appetite for troubled properties.
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