A joint venture led by Harbor Group International has acquired a trophy office tower in downtown Chicago. According to the Norfolk, Virginia-based private equity real estate firm, the venture purchased the office building at One South Wacker Drive for $221 million. The firm did not disclose the seller, but data provider Real Capital Analytics lists it as TIAA-CREF.
Harbor Group’s investment partners in the transaction are Israeli insurance giant Clal Insurance and New York-based Image Capital. T. Richard Litton, president of Harbor Group, said in a statement: “This property should provide excellent returns to our investors.”
Located at the corner of Madison Street and Wacker Drive in Chicago’s West Loop submarket, the 40-story, 1.2 million-square-foot office building currently is 80 percent leased to more than 40 office and retail tenants. Tenants include McGladrey, Aetna, PlS Financial Services and HNTB Corp.
Harbor Group plans to make capital improvements to the asset, including a new entry atrium, lobby renovations and upgrades to the elevator cabs, common corridors and restrooms. On the mezzanine level will be the tenant-only OSW Club with a signature Harbor Fit health & wellness center, conferencing facilities, the building management office and a tenant lounge overlooking the entry atrium. “We plan to focus our improvements on tenant retention and attracting new tenant interest from the desirable West Loop submarket,” added Litton.
Harbor Group also owns several other properties in downtown Chicago, including 300 South Wacker, a 512,500-square-foot office building; 111 West Washington, a 580,000-square-foot office tower; and 2 North LaSalle, a 715,000-square-foot skyscraper.