IBM Corp., which has been testing the market on a move from its namesake riverfront offices, is in lease negotiations at Hyatt Center, the Pritzker family’s new Wacker Drive skyscraper.
The Armonk, N.Y.-based information technology firm has about 247,000 square feet of space in One IBM Plaza, 330 N. Wabash Ave., under a lease that expires in 2006, according to real estate research firm CoStar Group. Sources say IBM’s actual space may be closer to 280,000 square feet.
IBM is not certain to make a deal at Hyatt Center, 71 S. Wacker Drive, the 1.5 million-square-foot tower scheduled to be completed this year, sources said. But the firm is in negotiations to take 130,000 square feet of space, sources said.
Chicago-based brokerage J.F. McKinney & Associates Ltd. represents Higgins Development Partners LLC, the Pritzker-backed firm developing Hyatt Center. Chicago-based U.S. Equities Realty LLC represents IBM.
A move would mean a loss of downtown prominence for IBM, which has been a tenant in the Mies van der Rohe-designed structure since 1971. The 1.3 million-square-foot building is owned by Chicago-based Prime Group Realty Trust, which has made an aggressive renewal proposal, sources said
IBM and Prime Group executives declined to comment.
Shoreham financing deal: The developers of Lakeshore East have completed construction financing for the Shoreham, a 550-unit apartment building in the 28-acre development site east of the Illinois Center office complex.
Washington, D.C.-based AFL-CIO Building Investment Trust will be an equity partner in the 47-story tower, which is expected to be competed in 2005, said architect James R. Loewenberg, president of Chicago-based Near North Properties Inc. That company is the co-developer with Magellan Development Group Ltd., also of Chicago.
Newport Beach, Calif.-based Pacific Mutual Life Insurance Co. is providing a construction loan, he said.
The project will be financed with $24 million in equity, with the construction loan covering the balance of the $129 million cost, sources said.
In arranging the financing, Chicago-based MJ Partners Real Estate Services advised the developers. Chicago-based Cornerstone Advisors Inc. advised the AFL-CIO fund.
Competitors team up: New York real estate entrepreneurs Joseph Chetrit and Jeffrey Feil were bidding against each other for Sears Tower before deciding to team up to buy the 110-story skyscraper from Metlife Inc., according to sources familiar with the sale.
Their competing offers prompted MetLife, advised by real estate investment bank Eastdil Realty LLC, to speed up the bidding process, sources said.
To finance the deal, the venture is in talks with Wachovia Securities for a loan of at least $600 million, which will be financed with commercial mortgage-backed securities, sources said. Chetrit, of Chetrit Group LLC, will likely be the general partner of the venture acquiring the tower, sources said.
Klein quits CB Richard Ellis: Michael Klein, 40, is leaving CB Richard Ellis Inc. to become a principal in the Chicago office of New York-based real estate firm GVA Williams.
The Wichita, Kan., native came to Chicago in 1999 from Insignia/ESG Inc.’s Connecticut office to be head of the Midwest region. He stepped down from that role in 2002 to focus on client services. After last year’s merger of Insignia with CB, Klein, an attorney, became an executive vice president with the combined firm.
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Building sale fizzles: A deal to sell 250 S. Wacker Drive to a suburban Detroit development firm has collapsed, sources said. Real Estate Development and Investment Co., or Redico, would have acquired the 16-story building from a partnership that includes Scott Toberman, president of Chicago-based European American Realty Ltd. An executive with Redico could not be reached for comment.