Prime Spends $24M, Has $50M Loan for Big User

CHICAGO-Prime Group Realty Trust has recently completed a $24 million upgrade project at 330 N. Wabash, formerly known as the IBM building. The trust upgraded infrastructure and restored its lobby, and also has an additional $50 million for future work, in an admitted attempt to woo tenants to the empty top 11 floors vacated by Jenner & Block, company officials say.

The law firm moved into more than 400,000 square feet in the new 353 N. Clark St. building, leaving the 52-story Wabash tower almost half-vacant. However, the first 12 floors of the building are being converted to hospitality, with 335 hotel rooms under construction, not owned by Prime Group. Jeff Patterson, CEO of the company, says he thinks the hotel is supposed to open in 2012. LaSalle Hotel Properties is the major owner of the rooms, and there’s been no announcement yet of a brand, Patterson says.

Floors 13 to 37 are fairly well leased, and go for about mid-$20 per square foot, net, Patterson tells GlobeSt.com. He says because there’s no new construction planned, 330 N. Wabash has a good chance of being a top contender for the next tenant that looks to make a big-block move. “One of the reasons we repositioned the building is to lease those top floors,” he says. “There’s been some interest, it’s a pretty unique space. The $50 million is our dry powder to do a lease deal, it can be used as tenant improvement and leasing commission costs.”

The building, designed by famed architect Mies van der Rohe in 1973, had a bit of a setback, literally, when the 92-story Trump International Hotel and Tower building went up next door on the former Sun-Times building site. The Trump building went up between Prime Group’s building and the views of Lake Michigan and the Chicago River. However, Patterson says the top floors barely have any blockage. “There’s only three or four offices in the middle that don’t have that great a view, and it’s still one of the best views in the city,” he says. “Plus, the Trump building now gives us easier access to Michigan Avenue, and adds retail amenities for our tenants.”