Stanton Road Capital is buying the leasehold on a Michigan Avenue building that’s lagged the greater Downtown office market.
The El Segundo, California-based investor is under contract to pay $34 million for the 22-story Borg Warner building at 200 South Michigan Avenue, according to Crain’s. The seller, Honolulu-based Shidler Group, is retaining the land underneath the building.
Shidler bought the land and the 372,000-square-foot building in 2014 for a total of $69 million. It secured a $33 million loan for the building and a $19.8 million loan for the land.
The Shidler entity that owns the building paid more than $1.6 million in rent to its entity that owns the underlying land between Feb. 1, 2017 and Jan. 31, 2018. The 2014 deal stipulated the rent would tick up by 3 percent every year until 2060.
The building was less than 80 percent leased when it went on the market last year, below the 87 percent average for Downtown and down from 92 percent when Shidler bought it.
The deal is Stanton Road Capital’s second acquisition of a Chicago-area property from a Hawaii-based seller in nine months. The firm in October bought the 214,000-square-foot Arbor Lake Centre in Northbrook from the James Campbell Company for $18.7 million.
[Crain’s] — John O’Brien