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CHICAGO-New York-based Lend Lease Real Estate Investments, Inc. has bought the 497,500-sf office building at 225 W. Washington St. in a 50-50 joint venture with an unidentified local partner on behalf of an institutional investor. Although the purchase price was not disclosed, locally-based REIT Equity Office Properties Trust reportedly backed out of a deal earlier this year for $90 million, or $181 per sf.

John Schoser, a principal in Lend Lease’s local office, says the joint venture paid “below replacement cost” for the class A office building, which has a tenant roster that includes Jenkins & Gilchrist, Citadel L.P. and The Marmon Group.

Location also was a factor. Besides a West Loop address, the 28-story building is a block from an Chicago Transit Authority elevated stop as well as within walking distance of Metra’s two major commuter rail terminals.

“Given the purchase price below replacement cost and strong tenant roster, we expect this investment to provide our client with attractive risk-adjusted returns,” Schoser says.

The 15-year-old building had been owned since 1992 by a partnership that included Delta Airlines Benefit Trust, Eastman Chemical Co. Pension Fund, Eastman Kodak Pension Fund and the Arthur D. Little Co. profit sharing plan.

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