River East Center
River East Center, a 251,000 square-foot mixed-use building in the Streeterville section of downtown Chicago has been sold for $133 million. A joint venture between Madison Capital and Wheelock Street Capital purchased the three-story building from former owner Intercontinental Real Estate Corp. Intercontinental, an active player in Chicago commercial real estate, had bought the River East Center in early 2006 for $117.5 million.
The sale price was slightly less than the $140 million estimated value by Crain’s Chicago earlier this month. The River East Center is situated on an entire city block that covers 2.8 acres and sits above an underground, four story parking garage with 1,154 spaces. It is reportedly 97.8 percent leased with tenants that include AMC Theatres, Lucky Strike, LA Fitness and Walgreens among others. There is also an 18-story Embassy Suites hotel and 58-story, 620-unit luxury condominium tower on the property, but they were not included in the sale.
Concurrent with closing for River East Center, Madison Capital and Wheelock Street Capital sold the underground parking garage to Laz Parking Realty Investors. A sale price was not disclosed.
Officials for Intercontinental Real Estate said the decision to sell River East Center was largely the result of strong market conditions for Chicago commercial real estate. Also, the high occupancy rate of established retail outlets made it an ideal time to sell River East Center.
Joseph Sweeney, director of asset management at Intercontinental, spoke with Crain’s Chicago about the deal.
“We just thought, with the existing market conditions this would be an opportune time to sell,” Sweeney said. “Based on the leasing we’ve accomplished, the quality of the tenants, it seemed like a good time.”
The new owners said in a press release they “purchased the asset with plans to re-brand and reinvigorate the retail profile of the asset,” though no further details were provided.