Slate Office REIT has inked deals for an acquisition in Chicago and a disposition in St. John’s, Newfoundland. The transactions are expected to close before the fourth quarter of this year, and represent an USD $155.5 million (CAD $202 million) outlay for an office tower in downtown Chicago with a $17.5 million counterbalance coming from the sale of the Fortis Building and associated Water Street properties in St. John’s.
“120 South LaSalle is a landmark downtown Chicago address, and is the US headquarters of CIBC, a leading Canadian based global financial institution and a key strategic financial partner of Slate Office REIT,” reports Slate’s chief executive officer, Scott Antoniak. This is the REIT’s second acquisition in the United States thus far in 2018.
The 23 storey, 657,000-square-foot building is located in the city’s central loop, near another Slate holding at 20 South Clark. The REIT will look to enhance value of its new property, which is currently 84 per cent occupied with a weighted average lease term of 10.4 years, through amenity offerings, retail repositioning and continuing office lease-up.
The 12-storey, 83,000-square-foot Fortis Building and six adjacent smaller buildings on Water Street comprise two acres of contiguous area in the St. John’s business district — a site marketed as “one of Atlantic Canada’s most exciting redevelopment opportunities”. Collectively, the buildings are more than 58 per cent vacant and Slate REIT’s overall occupancy will improve by 100 basis points once they’re off the books.