UPDATED, 9:55 a.m., June 28: A joint venture between Lynd, a commercial real estate investment fund, and Florida Value Partners, a Miami Lakes-based private equity group, led to a group’s purchase of about half of the John Hancock Center in downtown Chicago from Deutsche Bank AG this week, Lynd senior vice president Zac Gruber told The Real Deal.
In the deal, which finalized Monday, the group, including equity partner Mount Kellett and Chicago-based operator the Hearn Co., paid $140 million for 900,000 square feet of office space, outdoor and parking from a partnership of Deutsche Bank AG and NorthStar Realty Finance, which took control of the building last year after a Goldman Sachs Group venture real-estate fund and Golub & Co. defaulted on its debt.
“By New York standards, it might be low,” Hearn president Stephen Hearn, said of the sales price, first reported by the Wall Street Journal. “I think it was fair. We made a very good deal, but we were also the high bidder,” he told TRD.
Though Chicago real estate is rebounding, high unemployment dogs the commercial business. More than 100,000 Chicago-area jobs have been lost in the last four months, according to local broker Gary Lucido.
“The uncertainty effects prices,” Lucido said, even for a prominent building on Chicago’s ritzy Magnificent Mile.
The new Miami-Chicago partnership will take over up to the 44th floor of the trophy 100-story tower and investors expect to spend approximately $45 million on tenant and capital improvements, Gruber said.
“The building, while certainly iconic in stature, has not received the type of capital it deserves,” Gruber told TRD.
The roof rights, observatory – even the antennae – were sold off separately and the upper-building’s condos have for many years been privately owned.