Tough Customers Land 50,000 SF on Wacker Drive

Heitman, which originally had 130,000 sf at the building now owned by Prime Group Realty Trust, has reduced its space there to 80,000 sf, explains Julien J. Studley, Inc. executive vice president and co-branch manager Richard Schuham. Its 10-year deal at 191 N. Wacker Dr. is for 49,918 sf on the 25th and 26th floors.

Although confidentiality agreements prevent brokers from discussing specifics, asking rates at the property that opens in November are $23 per sf on a net basis. If that rate were used, the deal would be worth more than $11 million.

"Heitman made a smart real estate deal and it's a smart deal for the landlord," Schuham tells GlobeSt.com, adding the firm's credit-worthiness sweetened the package for potential lessors. "They were incredibly demanding, and rightfully so."

According to U.S. Equities Realty, Hines' building was 58% pre-leased in a West Loop submarket that has a deceptive 10.7% vacancy rate, and just 9% for class-A space. However, Schuham notes two other projects south on Wacker Drive will add 2.35 million sf, increasing the submarket's class-A inventory by 10%.

All of which did not have to be told to Heitman, which has originated $15 billion in commercial real estate loans since 1966 as well as serving as investment managers to pension funds and institutional players. The firm is well aware of the ownership structures of the buildings under consideration, Schuham notes.

"Heitman is a firm full of the greatest minds in real estate," Schuham says. "They're highly intelligent people in this arena."

While Schuham was joined by executive vice president and co-branch manager John Goodman and associate Dawn Clayton, Greg Van Schaack and Avi Tesciuba handled negotiations for Hines Interests.