Piedmont Office Realty Trust, Inc. has entered into a binding agreement to sell its largest asset, Aon Center, located at 200 E. Randolph Street in downtown Chicago, for a gross sales price of $712 million to The 601W Companies, a private real estate investment company. The sale is anticipated to close early fourth quarter of 2015.
Aon Center is an approximate 86% leased, 2.7 million square foot, 83-story, multi-tenant, trophy office tower constructed in 1972. Situated on approximately 3.5 acres in Chicago’s East Loop, Aon Center offers spectacular views of the city, Lake Michigan and Millennium Park, as well as superior amenities. Last week, Piedmont announced that the Kraft Heinz Company, the newly-merged, global food and beverage giant, will relocate its Chicago headquarters from Northfield, IL, to five floors of the building.
Piedmont President and Chief Executive Officer Donald A. Miller, CFA, said the successful sale of Aon Center will be the culmination of Piedmont’s long term strategy of transforming the asset into one of Chicago’s most prestigious office towers.
“We have been fortunate to attract a number of distinguished tenants to Aon Center, such as KPMG, Microsoft, United Health Group, Integrys, the Federal Home Loan Bank of Chicago, and most recently Kraft Heinz. Additionally, we have also been successful in renewing existing quality tenants such as Aon, JLL, AT&T, and Edelman,” Miller said.
Piedmont’s Ray Owens, Executive Vice President – Capital Markets, and Tom Prescott, Executive Vice President – Midwest Region, along with the JLL team of Bruce Miller and Nooshin Felsenthal, facilitated negotiations on behalf of the seller.
In conjunction with the closing early in the fourth quarter, the Company anticipates receiving net sales proceeds of approximately $640 million, net of buyer-assumed lease abatements and approximately $48 million in contractual tenant capital improvements and leasing commissions. Piedmont intends to use the proceeds to enhance its balance sheet through the pay-down of debt and to position the Company to potentially fund strategic acquisitions and/or selective share repurchases, depending upon the opportunities that arise.
