Saturday, April 05, 2008

Bank of America Seeking Sale Leaseback of Chicago Landmark

Commercial Property News - April 3, 2008

Bank of America Corp. is reportedly putting the 135 S. LaSalle St. building in Downtown Chicago on the block. If all goes according to plan, the bank will then lease back the space it occupies in the building--most of its total of 1.25 million square feet.

The building, one of the last built in Chicago before the Great Depression put a halt to commercial development in the city for many years, had previously been owned by ABN AMRO, former parent of Chicago-based LaSalle Bank. When the consortium of Fortis N.V., The Royal Bank of Scotland Group plc and Banco Santander Central Hispano, S.AU.K. bought the Dutch ABN AMRO last year, part of the deal was the sale of LaSalle Bank (along with the building) to San Francisco-based Bank of America.

According to a report in the Chicago Tribune, Bank of America has a long-standing policy of selling off real estate it acquires during its frequent M&A activity, and then leasing the space back for continued operations. Bank of America Corp. has hired Jones Lang LaSalle Inc. to take the property to market.

The prospect of such a major Central Loop office property on the market comes at a time of a lull in investment sales in Chicago that's attributed to the credit squeeze. Still, office space absorption and occupancy rates have been up in Downtown Chicago recently, which may bode well for attracting buyers for a building such as 135 S. LaSalle.

According to Grubb & Ellis Co., some 2.3 million square feet of Downtown Chicago office space was absorbed in 2007, the most since 2001. Vacancies stand at 13.3 percent in the Central Loop--the lowest of any Downtown submarket, and tied with North Michigan Ave.--and at 13.9 percent in the Loop as a whole. Sphere: Related Content

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