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CHICAGO-After undergoing a makeover but still about 84% leased, a 10-story office building at 29 N. Wacker Dr. has sold for $18.2 million. Boston-based Intercontinental Real Estate Corp. bought the class A building from GE Capital and Hines Interests L.P., which paid $8.7 million for it in 1997.

While it underwent extensive interior and exterior renovation designed by the architecture firm of Skidmore, Owings & Merrill, the 130,000-sf building’s location in the desirable West Loop submarket two blocks from the Richard Ogilvie Transportation Center was a selling point.

The sale is the third major office deal in the West Loop, with the three sales totaling $99.5 million. The other two sales involved 29-story 200 W. Jackson Blvd., which sold at $84 per sf, and 200 W. Madison St., which traded at $35 per sf.

The 29 N. Wacker Dr. purchase was made for the $250-million private-equity Intercontinental Real Estate Fund III, LLC, which is targeting current returns of 8% to 9% and an internal rate of return of 15% in its acquisitions. Planning to have up to 50% of its acquisitions outside New England, the fund’s first acquisition included the 75,000-sf Canyon at Wild Basin in Austin. TX.

Financing for 29 N. Wacker Dr. was obtained from Mellon Bank, which provided a $13.5-million first mortgage.

“We feel this property will serve as a strong fit for our third fund — targeting properties that are presently generating an attractive current return and also have the potential for capital appreciation through some degree of asset repositioning, re-tenanting or through moderate physical or financial rehabilitation,” says Intercontinental CEO and Chairman Peter Palandjian. “The recent upgrades to the structure coupled with its strong rent roll and superior location in one of the most important Chicago office market offers a very attractive investment opportunity for the fund.”Tenants include Intertec Publishing and American Federation of State, County and Municipal Employees.

Cushman & Wakefield office specialists Brian Nagle, Paul Lundstedt and John Gavin represented GE Capital and Hines Interests L.P. in negotiations with Intercontinental senior vice president John Matteson.

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