Source: Mid-America Real Estate Corp. CenterPoint Properties Trust has completed a deal with Caterpillar Inc. on a sale/leaseback of the construction equipment giant’s 280-acre manufacturing facility in southwest suburban Joliet.
The four-building, 2.9 million-square-foot complex is just east of the intersection of Interstate Highways 55 and 80.
But Peoria-based Caterpillar plans to consolidate its hydraulics manufacturing division in a more efficient, 1.45 million-square-foot building in the complex under a 15-year lease. That portion of the deal is expected to be announced on Wednesday. The value of the property could not be determined.
Caterpillar will eventually sell the rest of the site to CenterPoint Properties, which will redevelop the property, adding about 500,000 square feet of space, said CenterPoint’s Mike Mullen, president and chief operating officer of the Oak Brook-based real estate investment trust. That part of the deal will close in stages.
Teachers to acquire stake in REIT: In a matter of days, Equity Office Properties Trust is expected to announce a much-anticipated joint venture with Teachers Insurance and Annuity Association, the first of three such deals the REIT will make in the next month.
The New York-based teachers’ association will acquire an 80 percent stake in a portfolio of properties worth about $600 million, sources said. Included in the deal will be at least one local building, 101 N. Wacker Drive.
The teachers deal will be smaller than expected. But the Chicago-based REIT also is in talks with Australia-based Macquarie Office Trust about a joint venture that would include the Loop’s 161 N. Clark St., sources said.
The real estate company is part of Sydney-based Macquarie Bank Ltd., which this week said it would pay $135 million for Exelon Thermal Technologies, a provider of chilled water for air conditioning systems.
And Equity Office also is close to a deal to sell to Kan Am, a Munich-based investment adviser, an 80 percent stake in 225 Franklin Street, a 917,000-square-foot tower in Boston’s financial district.
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An Equity Office spokeswoman declined to comment. But during an analysts’ conference call last month, Chief Executive Richard Kincaid declined to offer guidance about 2004 earnings, saying the REIT had “a number of significant transactions” pending.
Harris weighs sale: Harris Bank is exploring a possible sale/leaseback of its headquarters building, 111 W. Monroe St., with Chicago-based Jones Lang LaSalle Inc. in line for the assignment, sources said.
A spokesman for the unit of Toronto-based Bank of Montreal declined to comment.
The 626,000-square-foot building is 96 percent leased, according to real estate research firm CoStar Group. But law firm Lord Bissell & Brook LLP, with about 230,000 square feet of space, is moving in 2006 to a new building at 111 S. Wacker Drive.
The building’s next-largest tenant, law firm Chapman and Cutler LLP, has about 162,000 square feet under a lease that expires in 2011, sources said.
Retail expansion plans: Retailers need as much as 50.2 million square feet of additional space in the Chicago area to meet current expansion goals, according to a survey of retailers and brokers by retail real estate firm Mid-America Real Estate Corp.
To gauge total demand, respondents were not asked to provide a time frame as to when the space would be needed, but instead to identify how many more stores are needed to fully penetrate the market.
Driving the demand is retailers who are re-evaluating their initial strategies and increasing the number of planned stores, said Jeff Kuchman, a principal with Oakbrook Terrace-based Mid-America.
It would take nearly seven years to build that much space, based on the current level of shopping center development, though some of those stores will take over existing space.