In 2018, CIM Group and Golub & Company expanded their Mag Mile footprint by paying $138 million for a 36-story Class B office tower.
For the 444 North Michigan Avenue property, the partners proceeded with an $18 million capital improvement program. That expanded its amenity offering, modernizing the elevators, renovating the fitness center and executing a spec suite program to raise the building’s profile.
The acquisition was financed with a $123 million debt package from Blackstone Group that was securitized into several CMBS deals, the most recent of which is BXMT 2020-FL3. Documents associated with the transaction provide an inside look at the property’s finances.
As of July, the 521,000-square-foot tower was 84 percent leased to 68 tenants, including companies in the entertainment, finance, healthcare, and technology industries. Average base rent for all tenants is $23.50 per square foot.
The largest tenant is Livongo Health with 53,000 square feet. The Mountainview, California-based biotechnology firm was acquired by Dallas-based telemedicine and virtual healthcare company Teladoc Health for $18.5 billion last fall.
No other tenant accounts for more than 5 percent of the property’s leasable area. The second-largest tenant, the Scion Group, is “North America’s largest privately‐held owner/operator of student housing.” Media companies National Cable Communications and Initiative Media NA and Comcast subsidiary TCI Great Lakes fill out the top five.
The building’s 11,000 square feet of ground floor retail space is occupied by Starbucks, the Peter Lik art gallery and the Purple Pig. CIM and Golub’s business plan involves adding 1,650 square feet of retail space by reconfiguring the lobby.
In normal times, 444 North Michigan would benefit from its prime location in the Magnificent Mile shopping district. But amid the pandemic, major retailers like Macy’s and the Gap have moved to close their stores in the area.
The building remains open and operating, and rent collection as of September stood at 94 percent. Across the street at 435 North Michigan Avenue, CIM and Golub are converting the neo-Gothic Tribune Tower, once home to the Chicago Tribune, into 162 luxury condominiums.