Capital sources, tenants continue to covet creative Loop assets

CHICAGO, April 3, 2018 — JLL's Capital Markets experts today announced the company has completed the sale and financing of the 833,000-square-foot office component of Sullivan Center, an iconic commercial complex with coveted large floor plates and a world class rent roll in the heart of Chicago's Loop. The buyer was New York-based 601W Companies. The sellers, a venture between New York-based private equity firm KKR and Madison Capital, had owned the property since 2016.

In addition to handling the sale, JLL also arranged acquisition financing for the buyer. The lender was Brookfield Asset Management.

International Director Bruce Miller and Managing Director Nooshin Felsenthal led the sale process. Managing Director Keith Largay handled the financing.

"This asset received significant investor interest because of its excellent location, strong tenant base and the fact that it is one of the few larger floor plate buildings catering to the progressive tenants driving demand in this market," said Miller. "At nearly full occupancy, it is clearly the type of property that tenants covet."

"As rents for high quality creative office space have accelerated, investors recognized that Sullivan Center also represented an excellent opportunity to increase rental income significantly over time," said Felsenthal.

Sullivan Center offers creative office space featuring high lofted ceilings and large floor plates ranging from more than 100,000 square feet on the lower levels to between 22,000 and 79,000 square feet on the upper levels. Originally constructed in 1899 as a department store, Sullivan Center has been a national historic landmark since 1970 and its upper floors were converted to office space in the early 2000s. It is currently 97 percent leased. Between 2001 and 2012, Sullivan Center underwent more than $200 million in renovations designed to modernize its mechanical systems and restore historical features.

"This was a competitive lending opportunity backed by an experienced sponsor and high quality asset," said Largay. "We continue to find very aggressive capital in the debt markets for transactions of this caliber."

The former owners previously sold Sullivan Center's 176,000 square feet of retail space — the two lower floors and basement level -- to Acadia Realty Trust in a separate $147 million transaction in August 2016.

Sullivan Center's State Street location, in the heart of Chicago's Loop submarket, provides tenants access to all seven CTA El lines. The property is also densely served by CTA bus service along State Street and Michigan Avenue as well as the new Loop Link BRT line and is within just a brief walk of both Union Station and Ogilvie Transportation Center. Nearby attractions include The Art Institute of Chicago, Millennium and Grant Parks, and the heavily trafficked State Street retail corridor.

JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm's in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether a sale, financing, repositioning, advisory or recapitalization execution. In 2017 alone, JLL Capital Markets completed $170 billion in investment sale and debt and equity transactions globally. The firm's Capital Markets team comprises more than 2,000 specialists, operating all over the globe.

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About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2017, JLL had revenue of $7.9 billion and fee revenue of $6.7 billion; managed 4.6 billion square feet, or 423 million square meters; and completed investment sales, acquisitions and finance transactions of approximately $170 billion. At the end of 2017, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of 82,000. As of December 31, 2017, LaSalle had $58.1 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated.