Posts Tagged ‘Kirkland & Ellis LLP’

Chicago Boasts 2010’s Biggest Commercial Transaction

Tuesday, August 17th, 2010

In Chicago’s – and one of the nation’s — largest commercial transactions of 2010, the 60-story, 1.3 million SF 300 North LaSalle Street skyscraper was sold for a whopping $655 million.  That adds up to $500 PSF. The buyer was KBS Real Estate Investment Trust II (KBS REIT II). The LEED Gold certified building, which is 93 percent occupied by such tenants as Kirkland & Ellis, LLP; Boston Consulting Group; GTCR Golder Rauner, LLC; and Quarles & Brady, LLP, is a Class AAA tower completed in the spring of 2009 by Hines Interests.300 North LaSalle Street sells for $655 million – that’s $500 PSF.

“This high-quality property, with its strong tenant credit and long-term leases, fits perfectly within our investment parameters to provide long-term cash-flow stability,” said Bill Rogalla, KBS Realty Advisors senior vice president.  “It qualifies as one of the newest and highest-quality properties built in the U.S. in Recent years.  The building’s features, unmatched view corridors and LaSalle Street address resulted in a rapid lease-up even during the economic turndown.  We expect the building’s Class AAA-quality and environmental attributes to contribute to significant tenant retention over the long term.”

The interesting thing about the deal is it’s an indication of the large capital pipeline the REITs have amassed.  Also, it proves that assets with long-term leases and high-credit tenants are still trading at historically low cap rates.

Big Deals Keep on Movin’

Thursday, March 12th, 2009

Contrary to popular perceptions, significant CBD office leases are still being signed, recession or no recession.

A case in point is KPMG LLP’s recent inking of a 15-year lease for 260,000 SF in the Aon Center at 200 East Randolph Street in the prized East Loop market.  The accounting and advisory firm will relocate its 1,700 employees from 303 East Wacker Drive in August of 2012 when the lease takes effect. aon-center The space on floors 53 through 61 will be vacant after law firm Kirkland & Ellis LLP moves to its new tower at 300 North LaSalle Street later this year.  Considering that the downtown Chicago office market experienced 200,000 SF of negative absorption during the fourth quarter of 2008, this is encouraging news indeed.

Part of the story is that the East Loop office market has fared relatively well through the recession, and experienced 500,000 SF of positive absorption last year.  It’s currently an extremely affordable market, with asking lease rates in the Aon Center at about $20 per square foot net.