Citigroup Center, a 1.5 million-square-foot, Class A, mixed-use tower located at 500 West Madison Street in downtown Chicago has been acquired by KBS Real Estate Investment Trust III for $425-million plus closing costs. The transaction, first announced in November, is the largest downtown Chicago office acquisition since 2010 when KBS bought 300 N. LaSalle St. for $655-million. The seller was Connecticut-based GE Asset Management. Transwestern will be the exclusive leasing agent and property manager.
KBS REIT III, a public non-traded real estate investment trust based in Newport Beach, California, reports that the 40-story skyscraper in Chicago’s West Loop is currently 93 percent leased. Citigroup, the largest tenant, occupies 152,089 square-feet through 2017 and pays pays $21.78/sf in rent with an option extend the lease for another five years. KBS also owns the 1.3 million-square-foot, trophy-class office tower at 300 N. LaSalle in the Chicago central business district. KBS plans to invest $66.4-million in renovations to the high-rise over the next several years, including costs for new leases.
“500 West Madison is another recent, prominent acquisition KBS REIT III has made in the office arena,” said Ken Robertson, KBS central regional president. “We feel the West Loop has become the epicenter of new development, adaptive re-use and urban renewal in Chicago’s CBD, and we believe this is an iconic asset that is literally connected to the transit grid of the entire region.”
500 West Madison, a LEED Gold certified building, sits atop the Ogilvie Transportation Center, making it ideal for commuters. The tower is home to major office tenants including Citigroup Inc. and W.W. Grainger and is the headquarters for Orbitz Worldwide Inc. Constructed in 1987 and designed by Helmut Jahn, the building is comprised of nearly 64,000 square feet of retail on the first two levels, including more than 45 stores and restaurants. The second level connects directly to a Metra rail station and offers a bridge to 2 North Riverside Plaza. Office floor sizes range from 31,000 to 47,000 square feet.
“We are honored to have been chosen by KBS as the leasing and management agent for 500 West Madison,” said Michael Lirtzman, executive vice president of Transwestern. “This building’s appeal to office users will only be enhanced by the strategic improvements KBS intends to implement as it takes ownership and makes a great building even better. Chicago’s West Loop is a sought-after location, and we are thrilled to have the opportunity to offer tenants a home in this iconic building.”
500 West Madison is Transwestern’s largest leasing and management assignment in the Chicago area. With this new assignment, Transwestern’s Chicago CBD leasing portfolio has almost tripled in size in 2013, placing the company among the top leasing brokerage firms in Chicago.
The Transwestern leasing team of Lirtzman and Courtney Baratz will be the exclusive leasing agents for the property.
Photo credit: Jarred Trost