175 West Jackson

175 W Jackson Blvd, Chicago, IL, 60604, US

Asset Description

Jones Lang LaSalle (Illinois), L.P. (“JLL”) has been exclusively retained to arrange the sale of 175 West Jackson (the “Property” or the “Offering”), a compelling value-add office opportunity located in Chicago. The 22-story property was designed by renowned architect Daniel Burnham and was constructed in two phases between 1912 and 1927. At 41% occupancy and 5.8 years of weight average lease term, 175 West Jackson provides durable in-place cash flow while providing an investor the opportunity to substantially increase NOI through lease up. Such leasing can be easily facilitated by a modern spec-suite program, which fare especially well in the Chicago CBD market. Further, the property had over $24 million invested to modernize the building and implement a robust amenity package. The large floor plates, contiguous blocks of available space, and opportunity for signage rights position 175 West Jackson as an ideal home for a tenant looking to have a sizeable presence.

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Attributes

Rentable area

1,418,763 sf

Number of floors

WALT

5.8 years

Media

Investment Highlights

Transformative Amenity & Lobby Renovations

175 West Jackson boasts one of the most comprehensive and high quality offerings in the Central Loop due to ownership's $17.1 million investment in the rooftop deck, tenant lounge, conferencing facilities, and state-of-the-art fitness center. A new owner will inherit the opportunity to allocate their capital towards their value-add lease-up business effort.

Incredible Value-Add Opportunity

With over $24 million invested in modernizing and amenitizing the building recently, a future owner is able to purely focus on stabilizing the asset through leasing both the office and retail vacancies.

Spec suites fare well in today’s market, with tenants valuing move-in ready space and placing an emphasis on access to amenities. 175 West Jackson implemented spec suites on the 14th floor and found success with both Loadsmart and WellRight. These two tenants total 50,000 square feet and both signed leases with tenant improvement packages that were significantly below market.

Since 2020, 83% of all new deals completed were spec suites or existing conditions. Tenants have placed an emphasis on having space where they are able to move employees in quickly. Further, 77% of constructed spec suites leased within 9 months, reducing downtime of vacant suites. Through building out the floors and adding conference rooms, offices and communal areas, the spec suites are designed to help prospective tenants visualize their new space. These suites are a powerful way for landlords to bridge the divide between raw space and finished offices. Further, modern space with access to high-end amenities help companies bring employees back to collaborate and work in person.

Discount to Replacement Cost

175 West Jackson provides investors the opportunity to acquire a Class A office asset at a substantial discount to replacement cost, providing a competitive basis for years to come. Due to the dearth of available land sites and the rising cost of construction, the replacement cost of a similarly well-located asset would be in excess of $780 per RSF. New developments would require net rents of $66 per RSF which is approximately 50% higher than the Property’s current market rents. Furthermore, trophy office assets in Chicago’s CBD average gross rents of $70 per RSF, making 175 West Jackson a 40% discount to similar quality assets located downtown. This spread creates the ideal path to rent growth and a hedge against future speculative development in the area.

Unrivaled Transit-Oriented Location

175 West Jackson benefits from superior connectivity and accessibility give its southwest location that puts it steps from the Quincy and LaSalle/Van Buren stations and under 10 minutes to major commuter train stations.