Chicago Boasts 2010’s Biggest Commercial Transaction

In Chicago’s – and one of the nation’s — largest commercial transactions of 2010, the 60-story, 1.3 million SF 300 North LaSalle Street skyscraper was sold for a whopping $655 million.  That adds up to $500 PSF. The buyer was KBS Real Estate Investment Trust II (KBS REIT II). The LEED Gold certified building, which is 93 percent occupied by such tenants as Kirkland & Ellis, LLP; Boston Consulting Group; GTCR Golder Rauner, LLC; and Quarles & Brady, LLP, is a Class AAA tower completed in the spring of 2009 by Hines Interests.

“This high-quality property, with its strong tenant credit and long-term leases, fits perfectly within our investment parameters to provide long-term cash-flow stability,” said Bill Rogalla, KBS Realty Advisors senior vice president.  “It qualifies as one of the newest and highest-quality properties built in the U.S. in Recent years.  The building’s features, unmatched view corridors and LaSalle Street address resulted in a rapid lease-up even during the economic turndown.  We expect the building’s Class AAA-quality and environmental attributes to contribute to significant tenant retention over the long term.”

The interesting thing about the deal is it’s an indication of the large capital pipeline the REITs have amassed.  Also, it proves that assets with long-term leases and high-credit tenants are still trading at historically low cap rates.