CHICAGO — John Hancock Real Estate, the U.S. unit of Manulife Real Estate (TSE: MFC), has purchased 150 North Michigan Avenue, a 41-story office tower located in the East Loop of Chicago’s CBD, for $102 million. With its diamond-shaped roofline and white exterior, the 661,482-square-foot, Class A tower is one of the most unique buildings in the Windy City.
John Hancock purchased the property from SEB Investment GmbH, a German real estate fund manager. SEB purchased the office tower for approximately $113.2 million in 1999.
John Hancock also owns and manages the 37-story 191 North Wacker Drive on Chicago’s West Loop and the 1 million-square-foot Schaumburg Corporate Center.
“John Hancock has been looking for opportunities to grow its real estate investment portfolio, and in the last 12 months we’ve successfully acquired more than $700 million in real estate assets in several diverse markets and property types,” said Kevin Adolphe, COO of Manulife Financial Corp.’s investment division and president and CEO of Manulife Real Estate.
“The purchase of 150 North Michigan Avenue supports John Hancock’s continuing strategy to invest in core real estate assets with solid long-term value, located in key markets throughout the United States. We are extremely pleased to add this significant asset to our portfolio mix.”
Crain Communications recently selected the property as the new home for its Chicago offices, leasing 65,487 square feet and taking occupancy last month.
The office tower, also known as the Crain Communications Building, overlooks Millennium Park and the famed Magnificent Mile shopping district. The property also features views of Lake Michigan.
“150 North Michigan Avenue is a Chicago landmark and a great example of the city’s rich, architectural heritage,” said Bruce Pearson, managing director who’s responsible for overseeing John Hancock’s real estate assets in the Midwest.
“Equally, it’s an exceptional complement to our existing portfolio and an ideal investment property that provides us with a great opportunity to benefit from an improving real estate market in Chicago, a market that we’ve been actively engaged in for close to 40 years,” added Pearson.
The office tower is the newest addition to John Hancock’s $4.3 billion real estate portfolio in the U.S., which totals 19.3 million square feet of office space in Boston; New York City; Washington, D.C.; Orlando, Fla.; Atlanta; Chicago; San Diego; Los Angeles and San Francisco.
Bruce Miller, James Postweiler and Nooshin Felsenthal of Jones Lang LaSalle’s Capital Markets Group in Chicago represented the seller in the transaction.
According to Transwestern, the direct vacancy for the East Loop stood at 14.2 percent at the end of 2009, but currently is 12.6 percent.
At the current pace of recovery, what is currently a tenant’s market is expected to become a landlord’s market in 2013, adds Jones Lang LaSalle.
The Class A asking rent in Chicago’s CBD is currently $35.64 per square foot, which has stayed steady since 2008.
Manulife is traded on the Toronto Stock Exchange (TSE). The company’s stock price closed Tuesday at CAN$13.31 per share, down from CAN$17.50 per share at this time last year (CAN$1 = US$1.0152).
— John Nelson