Chicago Business: Board of Trade Building Going up for Sale

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The landmark Loop tower’s owners look to cash out while the downtown office market is thriving. And with an asking price of more than $330 million, a sale would set a high bar for property values along LaSalle Street.
 
Chicago Business: Board of Trade Building Going up for Sale
CoStar Group

The Chicago Board of Trade Building at 141 W. Jackson Blvd.

The owners of the Chicago Board of Trade Building are putting the landmark tower up for sale, looking to cash out with a big profit as investors continue to bet on the downtown office market.

A joint venture of Chicago-based developer GlenStar Properties and Los Angeles-based private-equity firm Oaktree Capital Management is seeking more than $330 million for the 44-story office building at 141 W. Jackson Blvd., according to sources familiar with the offering.

A sale at nearly $240 per square foot would dwarf what the building overlooking the Loop’s financial corridor has traded for in recent years, netting the owners a big gain after major renovations and a flurry of leasing activity.

It would also set a high bar for office property values along LaSalle Street, where some landlords have started to invest heavily in modernizing older buildings to compete with new supply. A boom in demand for downtown office space—driven by companies wanting access to Chicago’s pool of young talent near the urban core—has boosted investor demand and allowed many landlords to cash out with hefty returns.

The owners then refinanced the building with a new $177.7 million loan in May 2017, when it was appraised at $275 million, according a Bloomberg report tied to the loan. A portion of that mortgage was packaged with other loans and sold off to commercial mortgage-backed securities investors.

 
The building today is 21 percent vacant, a much higher share than the 13 percent average vacancy for downtown office buildings, according to CBRE. But a run of new leases in recent years have driven up the value of a tower that was half-empty when GlenStar bought it seven years ago.

Among the recent additions: Chicago engineering design firm Talman Consulting last year signed a five-year lease for 17,000 square feet on the building’s 16th floor, and insurance company Resolute Management recently moved into about 19,000 square feet on the ninth floor, according to real estate information company CoStar Group. Tampa-based third-party logistics firm BlueGrace Logistics opened an office there last year and recently expanded to 15,000 square feet.

CME Group, which signed a 15-year lease for about 148,000 square feet in 2012 when it sold the building to GlenStar and USAA, remains the largest tenant.

The property posted $7.2 million in net operating income in 2018 from about $30 million in top-line revenue, according to the Bloomberg report.

Known for its open outcry trading pits and the faceless aluminum statue of Ceres, the Roman goddess of agriculture, that stands atop its roof, the CBOT Building was built in 1930 and stood as Chicago’s tallest tower until 1965, when it was supplanted by the Richard J. Daley Center. The Art Deco tower—which had cameos in movies like “Ferris Bueller’s Day Off” and “The Dark Knight” and served as the studio home for the 1970s TV dance show “Soul Train”—was designated a Chicago landmark in 1977 and listed on the National Register of Historic Places in 1978.

The owners hired the Chicago office of HFF to market the CBOT Building on their behalf.

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