October 26, 2006
By Dees Stribling, Midwest Correspondent
CARI L.L.C., an entity controlled by New York-based real estate investor Robert Gans, has bought 131 S. Dearborn Street--the Citadel Center--in Chicago for $560 million. The seller is Dearborn Center L.L.C., in which Chicago-based Prime Group Realty Trust has a 30 percent joint venture interest through a subsidiary of its operating partnership, Prime Group Realty L.P.
"This was a good time to sell the asset," Jeffrey Patterson (pictured), president and CEO of Prime Group Realty Trust, told CPN this morning. "It's stabilized and 93 percent leased. The capital markets look favorably on that kind of asset."
In recent years, New York investors have been among the keenest to acquire Chicago office properties, often as a function of re-investing proceeds from the sale of sky-high Manhattan properties into the relatively inexpensive Chicago market. Also this year 311 S. Wacker and 19 S. LaSalle sold to New York interests for $292 million and $29.8 million respectively, and other local buildings have passed to New York investors in previous years--including the iconic Sears Tower, which went for $840 million.
According to Patterson, marketing and selling the building took about six months. The property, which was completed in 2003, counts among its tenants law firms Holland & Knight L.L.P. and Seyfarth Shaw, as well as Citadel Investment Group L.L.C., which occupies about 632,000 square feet and lends its name to the building.
Prime Group owns 10 other office properties, primarily in metro Chicago, totaling 3.9 million square feet, one 120,000-square foot industrial property, and three joint venture interests in office properties totaling 2.6 million square feet. It leases and manages all 6.5 million square feet. "We're not currently looking to sell any other assets," added Patterson.
