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HFF closes sale of and arranges financing for 500 West Madison in Chicago

CHICAGO, IL, December 23, 2013 - HFF announced today that it has closed the sale of and arranged financing for 500 West Madison, a 40-story, 1.46 million-square-foot, trophy office property in Chicago`s central business district.
HFF marketed the property on behalf of the seller, GE Asset Management and UST XV Madison, Ltd., an affiliate of Estein & Associates USA of Orlando.  KBS Real Estate Investment Trust III, Inc. purchased the asset for $425 million free and clear of debt.  HFF also worked on behalf of the borrower to secure the $255 million fixed-rate loan through Wells Fargo Bank.  This is the first time 500 West Madison has been offered for 100% sale on a fee-simple basis since its completion in 1987.
500 West Madison is the largest Class A, LEED Gold certified building in Chicago.  In addition to office space, the property features two floors of retail space connected to the Ogilvie Transportation Center and 55 parking spaces.  The property is 92.7 percent leased to Orbitz Worldwide Inc., Acquity Group LLC and LKQ Corporation, who all maintain their global headquarters at the location, and Citigroup and AIG, among others, who maintain large offices at the property.  Situated directly above the Ogilvie Transportation Center, 500 West Madison is located at the terminus of the metra trains, CTA trains and buses, and is within close proximity of Chicago`s Kennedy Expressway (Interstate 90/94). 

The HFF team representing the seller was led by senior managing directors Jaime Fink and Jeff Bramson and managing director Mark Katz.

The HFF debt placement team representing the borrower was led by senior managing director Michael Kavanau and managing director Christopher Carroll. 

"500 West Madison is the most well-located office building in the entire Chicago CBD office market and the property`s heavily trafficked first two floors create an exceptionally rare and valuable retailing environment that cannot be replicated," said Fink.

"This was a once in a generation opportunity to acquire an A+ trophy asset that houses the concourse of one of the busiest commuter train stations in the country.  Nationally, comparable assets are seldom put on the open market," added Bramson.

"The debt community responded very aggressively to this offering given the exceptional sponsorship, low leverage structure, and the asset`s skyline defining prominence and irreplaceable location," said Kavanau.

Estein & Associates USA, Ltd. is a closely held partnership which, through affiliates, invests as an equity partner in high profile real estate projects in the United States.  Since 1994, affiliates of Estein & Associates have invested over $5 billion in real estate projects.  Such projects include the 1641-room luxury Peabody Hotel in Orlando, Florida (recently sold to Hyatt ) and the Citicorp Center and Citadel Center, both premier office buildings located in Chicago, Ill. Estein`s partners comprise some of the most recognizable names in the real estate industry and include privately held companies, public company pension plans and real estate investment trusts.

Founded by Peter Bren and Charles J. Schreiber, Jr. in 1992, KBS is one of the nation`s preeminent buyers of commercial real estate and structured debt investments.  KBS also owns 1.3 million square foot 300 North LaSalle on the north bank of the Chicago River in Chicago`s CBD.

HFF (Holliday Fenoglio Fowler, L.P.) and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (HF).  HFF operates out of 22 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing.  For more information please visit www.hfflp.com or follow HFF on Twitter at www.twitter.com/hff.  

HFF Senior Managing Director
(312) 528-3650

HFF Senior Managing Director
(312) 528-3650

HFF Senior Managing Director
(312) 528-3650

HFF Associate Director, Marketing
(617) 338-0990


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Source: HFF, Inc. via GlobeNewswire