Hines Sells 1.4 MSF Three First National Plaza in Chicago

September 1, 2011
By Barbra Murray, Contributing Editor

Thirty years after Hines developed Three First National Plaza in Chicago, the real estate company’s U.S. Core Office Fund has sold the 1.4 million-square-foot office property. The U.S. associate of Hong Kong-based Capital Partners, Downtown Properties, in conjunction with a consortium of South Korean investors, snapped up the premier 57-story skyscraper.

“The building was well positioned for sale to a long-term hold buyer,” Charles Hazen, president of the fund, told Commerical Property Excecutive. “The sale supported our objectives of having a balanced diversification among the major markets.” In July, the fund entered into an agreement to sell 49 percent of its interest in the 1.4 million-square-foot office high-rise One North Wacker in Chicago

Carrying the address of 70 W. Madison St., Three First National Plaza sits in the middle of Chicago’s bustling business and financial district. Hines made its entrée into the Windy City with the 1981 debut of the building, which is a design of architectural firm Skidmore, Owings & Merrill. The property, which also encompasses roughly 20,800 square feet of retail space, is 92 percent leased and features a tenant roster sprinkled with such names as Morgan Stanley Smith Barney, Fitch Ratings and a bevy of leading law firms.

Hines is not disclosing the financial details of the Three First National transaction. At mid-year, the average office building sales price in the central business district was $128 per square-foot, according to a report by commercial real estate services firm Transwestern. Recent deals include Parkway Properties sale of the 1 million-square-foot tower at 233 N. Michigan to Commonwealth REIT for $162.2 million and Behringer Harvard’s sale of its 90 percent stake in the 755,000-square-foot property at 200 S. Wacker to Pearlmark and Equity Group Investors for $95 million.