AT&T Seeking $290 Million Sale Leaseback of Chicago Office Tower

Crain's Chicago Business - July 16, 2007

AT&T Inc. is putting a nearly 1-million-square-foot building in the West Loop on the market in what could be a $290-million sale/leaseback deal.

As a part of the sale, the San Antonio-based telecom giant would sign a 10-year lease, says a spokesman. The Chicago office of real estate firm CB Richard Ellis Inc. is marketing the 31-story structure at 225 W. Randolph St., he confirmed. He declined to comment on a possible price, but people familiar with the listing say AT&T would pay net rent, not including taxes and operating expenses, of $18 to $20 a square foot. That would put the sales price in the range of $290 million, those sources say.

Since 2005, AT&T has done several sale/leaseback deals, which total “more than $1 billion that’s been redeployed back into the business, rather than sitting in real estate,” the spokesman says. Among those transactions was the $338-million sale of the Midwestern headquarters in 2005 to Inland Real Estate Group. AT&T signed an 11-year lease, not including renewal options, for the 1.69-million-square-foot campus in Hoffman Estates.

The nearly 2,300 employees in the West Loop building would not be affected by the sale, the spokesman says. AT&T or a predecessor has owned the building since it was built in 1966. Sphere: Related Content