Chicago CBD Office Property Sales Ramp Up in 2010

With investment activity at a near standstill in 2009, 11 multi-tenant office properties in Chicago’s Central Business District (CBD) changed hands in 2010. Investors showed interest in each end of the spectrum as the majority of transactions involved either core or distressed properties. While properties in large coastal cities (i.e. New York, Boston, and San Francisco) received most of the national attention, Chicago was home to 3 of the 10 largest transactions in the United States during 2010.

The largest transaction in Chicago, and 3^rd largest in the United States, occurred when KBS Realty Advisors purchased 300 North LaSalle for $655 million. At $503 per square foot, the transaction was the largest in Chicago’s history on a per square foot basis. The sales of 71 South Wacker and 353 North Clark, which both closed during the fourth quarter, marked the 4^th and 10^th largest office transactions in the U.S. at $625 and $385 million, respectively.

With investment activity picking up at the end of 2010, MB Real Estate expects transaction velocity to continue through 2011. Investors, both foreign and domestic, will continue to seek core assets as well as value-add plays in the CBD.

For our complete outlook on the Chicago Office market, please reference the MB Real Estate 4^th Quarter 2010 Chicago Market Overview and Submarket Snapshots.