The REIT paid $6.6 million in property taxes last year on itslone Chicago asset, the 1.07-million-sf 233 N. Michigan Ave.,formerly Two Illinois Center in the East Loop. At $6.25 per sf,property taxes on the building are the highest in ParkwayProperties' mostly Sunbelt portfolio.
"We like Chicago for other reasons," Rogers says during a recentNAREIT conference. However, even though the REIT aims to buyproperty at 20% below replacement cost or lower, that price may begoing up here quite rapidly, he adds.
"Right now, replacement cost is at the highest level I've seenin my life," says Rogers, 49, pegging it at $250 per sf in Chicago,compared to about $200 per sf in other markets. "It's anextraordinary number."
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