Private school wants $150M for East Loop campus, has perfect tenant in mind

GEMS World Academy shooting for about $635 a foot for sale-leaseback

TRD CHICAGO /
Jul.July 09, 2020 12:00 PM
Thomas Cangiano, Head of School for GEMS World Academy in Chicago and 350 E. South Water St. in the East Loop (Building photo by Eric Allix Rogers via Open House Chicago)

Thomas Cangiano, Head of School for GEMS World Academy in Chicago and 350 E. South Water St. in the East Loop (Building photo by Eric Allix Rogers via Open House Chicago)

A private school is looking to shed its East Loop campus in a sale-leaseback deal.

GEMS World Academy is seeking $150 million for its building at 350 E. South Water St. and an under-construction building at 355 E. Wacker Driver, according to Real Estate Alert, which first reported the news. Crain’s later cited the report. In total, the buildings span about 235,000 square feet.

GEMS, based in Dubai, wants the buyer to lease back the space under a 15-year deal that includes 2 percent annual rent increases. GEMS would use the proceeds to finish the Wacker Drive property, located next to the Vista Tower, according to REA.

Owners are increasingly turning to the sale-leaseback strategy to free up cash during the coronavirus pandemic, according to Crain’s. And even before the pandemic, sale-leasebacks were trending: more than $12 billion in assets were sold and leased back last year, up nearly 50 percent over five years.

GEMS received between $1 million and $2 million in PPP loans to save 110 jobs, Crain’s reported. The Chicago campus is GEMS’ only location in the U.S. [REA, Crain’s] — James Kleimann

 

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