CRE Midwest

KBS REIT III buys 500 W. Madison for $425 million; Transwestern named leasing agent

Transwestern has been named the exclusive leasing agent and property manager for Citigroup Center, a 1.5 million-square-foot, Class A mixed-use tower located at 500 W. Madison St. in downtown Chicago. KBS Real Estate Investment Trust III has purchased the property for approximately $425 million plus closing costs.

Transwestern has been named the exclusive leasing agent and property manager for Citigroup Center, a 1.5 million-square-foot, Class A mixed-use tower located at 500 W. Madison St. in downtown Chicago. KBS Real Estate Investment Trust III has purchased the property for approximately $425 million plus closing costs.

KBS REIT III, a public non-traded real estate investment trust based in Newport Beach, Calif., has selected Transwestern to lease and manage the 40-story skyscraper in Chicago’s West Loop, which is currently 93 percent leased.  KBS is one the nation’s most active buyers of office properties and also owns the 1.3 million-square-foot, trophy-class office tower at 300 N. LaSalle, also in the Chicago CBD. The company currently has 135 million square feet under management.

“500 West Madison is another recent, prominent acquisition KBS REIT III has made in the office arena,” said Ken Robertson, KBS central regional president. “We feel the West Loop has become the epicenter of new development, adaptive re-use and urban renewal in Chicago’s CBD and we believe this is an iconic asset that is literally connected to the transit grid of the entire region.”

500 W. Madison, a LEED Gold certified building, sits atop the Ogilvie Transportation Center. The tower is home to major office tenants including Citigroup Inc. and W.W. Grainger, and is the headquarters for Orbitz Worldwide Inc.  Constructed in 1987 and designed by Helmut Jahn, the building is comprised of nearly 64,000 square feet of retail on the first two levels including more than 45 stores and restaurants. The second level connects directly to a Metra rail station and offers a bridge to 2 North Riverside Plaza. Office floor sizes range from 31,000 to 47,000 square feet.

“We are honored to have been chosen by KBS as the leasing and management agent for 500 West Madison,” said Michael Lirtzman, executive vice president of Transwestern. “This building’s appeal to office users will only be enhanced by the strategic improvements KBS intends to implement as they take ownership and make a great building even better. Chicago’s West Loop is a sought-after location and we are thrilled to have the opportunity to offer tenants a home in this iconic building.” With this new assignment, Transwestern’s Chicago CBD leasing portfolio has almost tripled in size in 2013.

The Transwestern leasing team of Michael Lirtzman and Courtney Baratz will be the exclusive leasing agents for the property.