Shorenstein Properties has made its first acquisition on behalf of its latest real estate fund, Shorenstein Realty Investors 10. According to a statement, the San Francisco-based real estate investment firm has purchased 350 West Mart Center in Chicago from a subsidiary of Vornado Realty Trust. Although it declined to disclose the acquisition price, data provider Real Capital Analytics lists it as $228 million.
The purchase of the 1.24 million-square-foot office property is the first to be executed on behalf of Shorenstein Realty Investors 10, a $1.23 billion value-added fund that closed early last year. The fund primarily targets US office buildings “that provide opportunities for Shorenstein to add value through capital improvements, development or redevelopment, leasing or recapitalisation,” according to the firm.
Vornado Realty Trust sold the property through its subsidiary Merchandise Mart Properties (MMPI), which specialises in owning and managing trade showrooms and show buildings. Mark Falanga, president of MMPI, said that the firm sold 350 West Mart Center after converting it from an apparel showroom to an office property. Eastdil Secured brokered the deal.
“Over the last 20 years, MMPI began the transition of 350 West Mart Center from an apparel mart to an office tower. In the last eight years, there has been very strong demand for office space in the building. Since that time, the property attracted many large advertising, electronic trading and media companies to occupy the building,” Falanga added. “Once we substantially completed the conversion of the 350 West Mart Center to an office building, it no longer fit in our portfolio.”
Built in 1977, 350 West Mart Center was repositioned for a variety of office and creative-use tenants, such as advertising, telecom, financial services, media and educational institutions. Indeed, the property, located in the River North submarket, currently is 95 percent leased to tenants that include the Chicago Sun-Times, Fiserv and Comcast Cablevision.
“This is a well-located asset with an infrastructure that appeals to technology, creative use and financial tenants choosing to locate in major 24-hour cities such as Chicago,” added Douglas Shorenstein, chief executive officer. The property, which received LEED Gold certification in 2009, consists of 1.24 million square feet of office space in two adjoining 13-story towers and a long-term lease on a 521-room Holiday Inn.