{"id":1004088802,"date":"2013-12-19T06:33:03","date_gmt":"2013-12-19T14:33:03","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004088802"},"modified":"2022-12-08T08:05:43","modified_gmt":"2022-12-08T16:05:43","slug":"kbs-reit-iii-closes-chicagos-500-west-madison-for-425m","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/kbs-reit-iii-closes-chicagos-500-west-madison-for-425m\/","title":{"rendered":"KBS REIT III Closes Chicago&#8217;s 500 West Madison for $425M"},"content":{"rendered":"<p><i>By Keith Loria, Contributing Editor<\/i><\/p>\n<p><a href=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/12\/KBS.jpg\"><img loading=\"lazy\" decoding=\"async\" data-attachment-id=\"1004088804\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/kbs-reit-iii-closes-chicagos-500-west-madison-for-425m\/kbs\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/12\/KBS.jpg\" data-orig-size=\"1100,1650\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;1381231462&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;}\" data-image-title=\"KBS\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/12\/KBS.jpg?w=683\" class=\"alignleft size-medium wp-image-1004088804\" alt=\"KBS\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/12\/KBS.jpg\" width=\"200\" height=\"300\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/12\/KBS.jpg 1100w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/12\/KBS.jpg?resize=200,300 200w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/12\/KBS.jpg?resize=768,1152 768w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/12\/KBS.jpg?resize=683,1024 683w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/12\/KBS.jpg?resize=1024,1536 1024w\" sizes=\"auto, (max-width: 200px) 100vw, 200px\" \/><\/a>\u00a0KBS REIT III has acquired 500 West Madison, also referred to as Citigroup Center, an iconic, 1.5 million-square-foot mixed-use tower in Chicago, for $425 million plus closing costs.<\/p>\n<p>The acquisition marks the largest purchase in KBS REIT III\u2019s history and brings its total acquisition volume to $1.26 billion.<\/p>\n<p>\u201cKBS saw 500 West Madison as an investment that encompasses everything KBS REIT III looks for. A lot of 500 West Madison\u2019s appeal has to do with its location\u2014the West Loop has become a true epicenter of urban renewal, new development and adaptive reuse,\u201d Ken Robertson, KBS\u2019 regional president, told <i>Commercial Property Executive<\/i>. \u201cIt boasts extraordinary views and fantastic amenities that will only get better. It also holds a great advantage in its transit orientation. These facts and more give us an opportunity to create an exceptional work environment for office tenants.\u201d<\/p>\n<p>Arguably, one of the centerpieces of Chicago\u2019s commercial infrastructure, 500 West Madison is one of the most well-located transit-oriented office building in the entire Chicago CBD.\u00a0The property provides unmatched access to suburban trains, city trains, buses and expressways, which put it at the nexus of Chicago\u2019s transit network.<\/p>\n<p>According to Robertson, the company\u2019s philosophy is to buy great real estate assets in very dynamic submarkets.\u00a0To that end, this transaction was a perfect fit.<\/p>\n<p>\u201cChicago is a vibrant market filled with a prized talent pool, attractive lifestyle and a great business culture of innovation, especially in key districts such as the areas around 500 West Madison,\u201d he said. \u201cKBS is looking to buy in Top CBD\u2019s across the America, like Chicago and the West Loop submarket. These areas are a big focus for KBS.\u201d<\/p>\n<p>KBS will spend\u00a0$66.4 million in renovations and improvements\u00a0to the property over the next few years. Many industry analysts believe KBS made the move at the right time.<\/p>\n<p>\u201cAs we see the\u00a0office property\u00a0development and redevelopment dynamics\u00a0of\u00a0downtown\u00a0Chicago, it is obvious that it\u00a0continues to\u00a0move\u00a0further west,\u201d Robert Sevim, Studley\u2019s executive managing director, told <i>CPE<\/i>. \u201cBuildings like 500 West Madison are therefore going to substantiate the practicality of its location and continue to have a place on the pedestal of a \u2018top downtown\u00a0location,\u2019 being able to support companies\u00a0who continue to focus on accommodating the commuting preferences of their\u00a0employee base, who are now\u00a0relying\u00a0increasingly\u00a0on public transportation, whether by commuter rail or\u00a0CTA.\u201d<\/p>\n<p>With the acquisition of 500 West Madison, KBS is\u00a0making its second big bet in the downtown Chicago market, having acquired\u00a0300 North LaSalle in 2010\u00a0(the company sought to divest 49 percent of it last year.) It was the first noteworthy\u00a0office building\u00a0acquisition\u00a0in downtown Chicago made post-recession and\u00a0it did very well.<\/p>\n<p>\u201cWith regards to 500 West Madison,\u00a0it is making a\u00a0another big bet\u00a0in\u00a0downtown\u00a0Chicago,\u00a0but I would argue that its acquisition in 2010 of 300 North LaSalle did not require the same calculated \u2018market bet\u2019 that is true of its acquisition of 500 West Madison, which will seek to capitalize on the strength of the West Loop submarket dynamics in which the building resides and less so on the \u2018in-place\u2019 dynamics that were true of the 300 North LaSalle acquisition when the downtown Chicago market was only starting to find its way on the recovery trail,\u201d Sevim said. \u201cIn essence, 500 West Madison presents more of an \u2018opportunity\u2019 asset purchase than a \u2018core\u2019 asset purchase when compared to their 300 North LaSalle acquisition.\u201d<\/p>\n<p>The acquisition is the latest in a series of high-quality 2013 KBS REIT III purchases and the largest since the REIT commenced operation in 2011. Most recently, KBS REIT III\u2019s acquired 201 Spear St., a 246,563-square-foot, waterfront Class A office tower in San Francisco\u2019s South Financial District for $121 million.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>KBS REIT III has acquired 500 West Madison, also referred to as Citigroup Center, an iconic, 1.5 million-square-foot mixed-use tower in Chicago, for $425 million plus closing costs. <\/p>\n","protected":false},"author":952,"featured_media":1004088804,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1491,21783,13,21752,21742],"tags":[],"class_list":["post-1004088802","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-chicago","category-investment","category-midwest","category-mixed-use","category-latest"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v24.6) - 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