Home News Manulife Financial puts 55 W. Monroe up for sale

Manulife Financial puts 55 W. Monroe up for sale

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There is no asking price for the 55 W. Monroe of John Hancock Real Estate, a Manulife subsidiary. Purchased in 2014 $244 million when the building was 92% leased. However, with tenants moving out, 67% of the building is leased today, and a source familiar with the proposal said the property’s bid was in line with sales of other comparable downtown office buildings and the current office building. Expected to be well below $130 million based on Bill’s acquisition financing challenges. .

This list shows just how severely office building values ​​have fallen since the start of the COVID-19 pandemic. This has accelerated the trend of remote work, which has greatly weakened the demand for workspaces.record high downtown office vacancies The situation was exacerbated this year by the rapid rise in interest rates. Prospects are having trouble financing deals, further reducing the price sellers can get.

Nationwide office property sales fell 8% year-to-date to $92 billion through October, according to data and research firm MSCI Real Assets. The last four months have been particularly slow, with double-digit percentage declines each compared to the same period last year, according to the company’s data.

Manulife, which has benefited from several years of net cash flow from its Chicago office properties, appears less interested in waiting for office demand to pick up, prompting a significant financial haircut for office buildings. is proceeding.

A spokeswoman for Manulife declined to comment.

Some downtown office landlords have seen their properties drop in value so much that they realize they have no assets left in their buildings, rather than face potential foreclosure lawsuits. , is handed over to the lessor. Cook County real estate records show that the company has no debt on the building, so Manulife at 55 West Monroe has no choice.

According to the flyer, JLL has a number of tenants in the 41-year-old tower, with 56 companies occupying the building, none of which occupy more than 8% of the property. This provides buyers with “diversification and isolation from vacancy shocks, as well as over-focusing on a particular tenant or industry,” Fryer said.

The Financial Industry Regulatory Authority (FINRA) is the largest tenant, with 61,222 square feet of leased space expiring at the end of 2024, according to JLL. The building has a weighted average lease term of 2.6 years, which is a measure of the tenant’s remaining commitment to the property.

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