CHICAGO—The West Loop keeps attracting attention. Cole Real Estate Investments has just acquired The Hillshire Brands Company headquarters at 400 S. Jefferson St. on behalf of Cole Corporate Income Trust, Inc. for $97.5 million. CCIT typically invests in single-tenant corporate properties leased to creditworthy tenants under long-term net leases. This 233,869-square-foot headquarters was recently redeveloped by Sterling Bay Companies, a firm that has helped restart development in the flourishing neighborhoods west of downtown, and which bought the property in early 2012 and signed a long-term net lease with Hillshire. They re-did all of its infrastructure and building components and added windows to all four exposures, flooding the building with natural light.
“This was a unique opportunity to acquire a Class A, single-tenant office in the desirable West Loop of Chicago,” said Boyd Messmann, senior vice president of office and industrial acquisitions, who represented Cole in the transaction. “One of the key factors was the long-term lease – nearly 15 years – with an investment-grade tenant.”
Last year, Chicago-based Sterling Bay bought the nearby Fulton Market Cold Storage at 1000 W. Fulton and began converting the 550,000-square-foot structure into modern office space. That project has helped drive even more investor interest and activity in the surrounding area.
CCIT claims their portfolio now has 27 wholly-owned properties in 15 states, totaling approximately 4.6-million- square-feet with a purchase price of approximately $731.1 million. The overall weighted average remaining lease term is nearly 11 years. Furthermore, more than 65% of CCIT’s portfolio consists of tenants rated by Standard & Poor’s, and of those, more than 88% are rated investment grade.