Wednesday, June 25, 2008

Bank of America Nears $190 Million Sale Leaseback of Chicago Office Tower

Crain's Chicago - June 25, 2008

Bank of America Corp. is close to a deal to sell the former LaSalle Bank Building for roughly $190 million and lease back as much as two-thirds of the 1.2-million-square-foot landmark tower.

The Charlotte, N.C.-based banking giant is in final negotiations to sell the 44-story skyscraper at 135 S. LaSalle St. to New York-based AmTrust Realty Corp., according to sources familiar with the transaction. B of A inherited the Art Deco classic as part of last year’s acquisition of LaSalle Bank’s parent company.

A B of A spokesman confirmed the negotiations with AmTrust but declined to comment on the price. He also declined to comment on how much space the bank would lease, except to say that no jobs would be affected by the deal.

The bank currently occupies about 800,000 square feet in the building, according to real estate research firm CoStar Group Inc.

As a result of the deal, B of A will reduce its occupancy expenses and cut costs by getting out of the property management business for outside tenants, the spokesman said in an e-mail. “This transaction also would free up capital and allow us to continue to reinvest in our businesses,” he said in the e-mail.

B of A has offered to provide a loan to the winning bidder, sources say, a key boost to the deal at a time when many potential transactions are not moving ahead because of the difficulty of obtaining financing.

The deal could close as soon as next month. An executive with Chicago-based real estate firm Jones Lang LaSalle Inc., which is advising B of A in the sale, declined to comment.

The transaction is believed to be the second Chicago acquisition for AmTrust Realty, a low-profile real estate investment firm owned by brothers Michael and George Karfunkel.

In April 2004, Amtrust acquired 33 W. Monroe St., which once housed the headquarters of defunct accounting firm Arthur Andersen LLP. Since then, Amtrust has leased up the 879,000-square-foot building. The vacancy rate has dropped to 10.1%, compared to 67.1% when purchase was made, according to CoStar. Sphere: Related Content

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