Equity Group Investments and Transwestern Investment Company have formed a joint venture with the owner of 200 S. Wacker Drive in Chicago to recapitalise the office tower. The original owner, Dallas-based commercial real estate investment firm Behringer Harvard, will retain a 10 percent ownership stake in the 40-storey, 759,000-square-foot property in the West Loop of Chicago's central business district.
Equity Group Investments invested in the building through the Zell Credit Opportunities Fund, which focuses primarily on debt investments and capital restructurings. Sam Zell, chairman of the Chicago-based investment firm, said in a statement that they were able to acquire an interest in the asset “below replacement cost”. A spokesperson for Equity Group Investments declined to comment further.
According to data provider Real Capital Analytics, the recap values the property, which is 70 percent occupied, at $117.8 million, or roughly $155 per square foot. The JV plans to make $40 million worth of improvements to the building.
Behringer Harvard acquired the office tower in November 2007 as part of a portfolio of four Chicago office properties from Boston-based Beacon Capital Partners. The properties were purchased through Behringer Harvard REIT I. According to the firm, it will continue to serve as daily manager of the property while bringing in additional capital partners. J.F. McKinney & Associates will serve as the leasing agent.
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