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BentleyForbes Enters Chicago at Last with
Pru Plaza Buy
By Dees Stribling, Midwest Correspondent - CPN
May 31, 2006 - After holding the 2.2 million-square-foot Prudential Plaza in Chicago for only a few years, San Francisco-based Shorenstein Properties L.L.C. has sold the asset to another California company, BentleyForbes of Los Angeles. The two-building property traded for about $470 million, or roughly $213 per square foot. The Chicago office of Eastdil Secured brokered the Pru Plaza sale, representing both parties.
Though the deal represents BentleyForbes' largest single-property acquisition to date and also marks its entry into the Chicago market, it's hardly the company's only recent purchase. In 2005, the company bought roughly 1.5 million square feet of multi-tenant office properties in Texas and Washington, D.C.
"We look at properties in all the major markets," David Cobb, president & CEO of BentleyForbes, told CPN this afternoon, noting that about a year ago the company tried unsuccessfully to acquire Prime Group Realty Trust, which owns office assets in Chicago. "We learned a lot about the Chicago market in the time we spent on that," he said.
Cobbs explained that Prudential Plaza, along with much of the rest of Chicago, now has considerable upside potential when it comes to both leasing and rent growth. "Two years ago, Deloitte & Touche vacated about 16 floors of Pru Two, and occupancy fell to about 70 percent from 95 percent," he said. "When we put it under contract two months ago, occupancy was about 81 percent, and now it's 85 percent. We've seen good leasing activity, and that will continue as the Chicago market continues its comeback."
He also cited the relatively new Millennium Park as an important new anchor for the East Loop submarket. "The impact of that park really helped sell us on this particular location," he said. "It's an impressive facility, and it's changed the fundamentals of the East Loop for the better."
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