Another premier Chicago office building is on the block.
The 1.5 million-square-foot Citadel Center, at 131 South Dearborn Street, could attract offers as high as $600 million or $400/sf. Foreign and domestic core investors are viewed as the likely bidders.
The seller, a partnership between German syndicator U.S. Treuhand and Lightstone Group, has given the listing to Jaime Fink of Holliday Fenoglio Fowler.
The Central Loop building is 91% occupied, which is better than the downtown average of 85%. Hedge-fund operator Citadel Investment leases 325,000 sf through 2013. Other tenants include J.P. Morgan Chase (through 2017) and law firm Seyfarth Shaw (until 2022). The average lease term is about 12 years. Rents average about $25/sf on a triple net basis.
Citadel Center, formerly known as Bank One Corporate Center, includes about 100,000 sf of street-level retail space that is almost fully occupied. There is also a garage with about 250 spaces.
Prime Group Realty of Chicago constructed the property in 2003. It sold a 70% senior interest that October to U.S. Treuhand for $300 million. At the time, the occupancy rate was 65%. Lightstone, an investment firm controlled by investor David Lichtenstein, assumed the 30% subordinated interest last July via its $889 million acquisition of Prime Group. Prime Group still manages the property as a division of Lightstone, which is based in Lakewood, NJ.
This is the second Prime Group property that Lightstone has marketed in recent months. In February, it listed Continental Towers in Rolling Meadows, IL, with Cushman & Wakefield. The 925,000-sf office complex is expected to fetch about $150 million, or $162/sf.
Citadel Center is one of several prominent Chicago office properties to hit the market this year. Others include the 1.2 million-sf building at 222 South Riverside Plaza, the 1 million-sf building at One Financial Place, the 868,000-sf building at 333 West Wacker Drive, the 841,000-sf building at One South Dearborn and the 503,000-sf building at 444 North Michigan Avenue.
Several deals have been struck. Behringer Harvard has agree to buy 222 South Riverside Plaza from Beacon Capital Partners for about $280 million, while Houston-based Hines will buy 333 West Wacker from German syndicator KanAm for $224 million. Also, Beacon will pay a Metropolitan Life partnership about $255 million for One Financial Place, located at 440 South LaSalle Street.
