Washington Point Sells for $37M in TIC Play

NAPERVILLE, IL-Griffin Capital, on behalf of 28 individual investors completing 1031 tax deferred exchanges, has purchased Washington Pointe, a 163,623-sf office building here for $37.5 million. The property, located at 535 E. Diehl Rd., was purchased from the Opus Group, the developer of the building.

Built in 1999, Washington Pointe is 100% occupied with three of the four tenants occupying the building since 2000. The tenants include Millward Brown and Concentra Preferred Systems, which collectively lease 93% of the building; Smith Barney, which leases 5.8%; and a first-floor café, which occupies the remaining space.

The property is located along the East-West tollway, where the direct vacancy rate hovers around 16% according to CB Richard Ellis’ second quarter market report. For class A space, vacancy is posted at 14.8%, with asking rates between $16 per sf and $18 per sf.

“The East-West market is experiencing tremendous year-to-date leasing activity and should continue to outperform other Midwest office markets,” says Don Pescara, managing director of Griffin Capital’s Chicago office.

The tenant-in-common transaction was structured as a securities offering, with a 10-year holding period. Griffin Capital raised $14.30 million in total equity and JPMorgan Chase Bank provided a $23.17-million first mortgage loan.

Opus Property Management, a unit of the Opus Group, has been retained by Griffin Capital to manage Washington Pointe, and CB Richard Ellis has been engaged as the leasing agent.

Washington Pointe is Griffin Capital’s second tenant-in-common transaction in the Chicago region. In January 2005, the company sponsored the acquisition of a 700,200-sf warehouse distribution center for $24 million in Monee, which is 25 miles south of Chicago.