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CHICAGO-Manulife Financial has paid $222 million for 191 N. Wacker Dr., or a lofty $303 per sf, another sign of pent-up demand for class A office assets despite a sagging rental market. Developed by Houston-based Hines Interests LP, the 37-story building at Wacker Drive and Lake Street was sold by a joint venture that included the developer and California Public Employees’ Retirement System.

The $303 per sf price rivals the high-water mark set in 2002 by RREEF’s $410-million purchase of UBS Tower at 1 N. Wacker Dr. That deal was at $315 per sf.

Total vacancy in the West Loop is 18.7%, according to US Equities Realty’s most recent office market report, but 191 N. Wacker Dr. is 90% leased less than two years after completion. The tenant roster includes Gardner Carton & Douglas LLP; Much Shelist Freed Denenberg Ament & Rubenstein, PC; Watson Wyatt Worldwide; Heitman Financial; and RSM McGladrey.

“The project was developed during a challenging leasing market and attracted a great tenant roster,” says Hines senior vice president Greg Van Schaack. “We continue to see that well-designed and executed office developments in Chicago attract the best tenants and healthy investor interest.”

Hines stays on as manager and leasing agent for Manulife, which expands its Chicago portfolio by more than 60% with the purchase of the award-winning building designed by Kohn Pedersen Fox. The life insurance company now has 5.3 million sf of office and industrial space in the Chicago market, or 20% of its entire $3.4-billion portfolio.

“It’s an exceptional complement to our existing portfolio of high-quality properties, located in strong, diverse regions, and Chicago is key to that mix,” says Manulife Financial vice president of US real estate operations Steve Ferguson of 191 N. Wacker Dr.

Brian Nagle of Cushman & Wakefield represented National Office Partners LP, the joint venture of Hines Interests and CalPERS, the largest public pension fund in the US.

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