CBRE Global Investors’ US managed accounts group has acquired a 49-story trophy office building in Chicago on behalf of a consortium of Korean investors led by Korea Post. Although CBRE did not disclose the financial terms of the transaction, the Los Angeles-based investment firm reportedly purchased the property from Tishman Speyer for approximately $312.6 million, according to data provider Real Capital Analytics.
As foreign interest in US real estate has begun to swell, the transaction corresponds with a growing trend of cross-border investments. Indeed, the purchase of 161 North Clark Street represents the Korean clients’ entry into the US market.
Peter DiCorpo, president of the managed accounts group, told PERE that the Korea Post consortium was interested in making stateside investments due to the transparency and good rule of law in the American real estate market, as well as the US economy’s strong emergence from the global financial crisis. “The clients identified investing in the US as a primary goal of their strategy,” he said.
Additionally, DiCorpo cited the competitive and sluggish nature of Korean real estate as reasons for looking to the US. Having worked with the clients in their home market, he added that the established partnership likely will lead to future investments on behalf of the consortium throughout the US.
The property, located in Chicago’s Central Loop submarket, totals more than one million square feet. Known as the Chicago Title and Trust Center, the building is 93 percent leased to tenants with limited rollover and features a underground connection to the Clark/Lake elevated train station, which houses the five primary train lines in the central business district and offers direct access to both the Midway and O'Hare airports. “It’s the Grand Central of Chicago in terms of transportation,” said DiCorpo.
The US managed accounts team plans to implement a $14 million capital campaign to upgrade existing amenities and maintain the property’s existing LEED Silver certification. CBRE also plans to market the improvements in order to attract new tenants as well as retain existing tenants and accommodate their expansion needs.