Canadian Onni Group Closing on Purchase of 200 N. LaSalle Office Tower

By Gabriel Circiog, Associate Editor

Vancouver, B.C.-based Onni Group is closing on its first Chicago investment after agreeing to pay over $95 million for a Loop office high-rise with a past-due loan. ChicagoRealEstateDaily.com reports that the Canadian real estate company is ready to pay over $147 per square foot to Younan Properties Inc., the Woodland Hills, Calif.-based owner for the 30-story tower located at 200 N. LaSalle Street.

The Loop tower opened in 1984 and is currently only 66-percent leased, the largest tenant being Level 3 Communications Inc. with 95,103 square feet. Through the sale, Younan will be able to pay off a securitized mortgage on the property which came due in October. Younan owes $86.6 million on the loan, which was part of a commercial mortgage-backed securities offering. Although Younan agreed to sell the tower to a joint venture of Fulcrum Asset Advisors LLC and Angelo Gordon & Co., the deal fell apart.

The pending acquisition of Onni Group is part of a growing trend of Canadian real estate investors seeking deals in the United States. Paul Lundstedt, executive vice president in the Chicago office of CBRE Inc., confirms that Canadian REITs have intensified their activities in the U.S. market, especially over the past 12 months.

Although Dan Bell of Onni Group’s acquisitions group did not comment on 200 N. LaSalle, he confirmed the company is focused on the Chicago market as buildings are priced well below replacement cost and there are value-add opportunities in some distressed properties.

Onni Group owns over 5 million square feet of commercial real estate, of which around 700,000 square feet are office space. Most of the properties are in western Canada, but Onni also owns over 2,500 apartment units in Phoenix and two office buildings in Los Angeles. According to Bell, future plans include developing two new multifamily high-rises in Los Angeles.

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