CHICAGO-Holliday Fenoglio Fowler LP has arranged $522 million in financing for the purchase of the Citadel Center, at 131 South Dearborn. An entity controlled by Robert Gans, a real estate investor based in New York City, has agreed to pay $560 million for the property. Dearborn Center LLC, a partnership between Estein & Associates and Prime Group Realty Trust, is the seller of the 1.5-million-sf building.

The HFF debt team consisted of senior managing director Mike Kavanau and director Tim Joyce. JP Morgan Mortgage Capital provided the $522-million 10-year interest only, fixed-rate acquisition financing for the borrower. The seller sold because it had created value by leasing up the property, said an HFF spokeswoman. “The loan was highly structured and hotly competitive, resulting in a rate of just more than 6% for more than 90% of the capital stack,” Kavanau says in a statement.

Prime Group Realty Service LP, a subsidiary of the building and leasing manager Prime Group Realty Trust Inc., owns a 30% stake interest in Dearborn. The purchase and sales agreement stipulates that Prime Group will remain as the manager and leasing agent through Aug. 31, 2012. The building is approximately 91% occupied, with tenants such as Citadel, JP Morgan Chase, Holland & Knight, Seyfarth Shaw and Perkins Coie LLP.

The ownership REIT estimates that the share of the net proceeds from the sale will be approximately $82.5 million, with a book gain of approximately $11 million from the transaction. A Prime Group official says the REIT will use approximately $57 million of the net proceeds to pay down corporate level debt. Prime Group developed the 37-story building in 2003.

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