Cole Real Estate Investments Tuesday announced the acquisition of The Hillshire Brands Co. headquarters on behalf of Cole Corporate Income Trust Inc. for $97.5 million. CCIT invests primarily in strategic single-tenant, income-producing, necessity corporate properties leased to creditworthy tenants under long-term net leases.
The 233,869-square-foot mission-critical headquarters facility at 400 S. Jefferson St. was recently redeveloped by Sterling Bay Cos., which entered into a long-term net lease with Hillshire early in the process. All of the infrastructure and building components were completely re-done with Hillshire’s build-out of the property, and windows were added on all four exposures, allowing for a substantial amount of natural light. The property’s location in the West Loop submarket of the Chicago Central Business District provides visibility and accessibility, including public transportation.
“This was a unique opportunity to acquire a Class A, single-tenant office in the desirable West Loop of Chicago,” said Boyd Messmann, senior vice president of office and industrial acquisitions, who represented Cole in the transaction. “One of the key factors was the long-term lease – nearly 15 years – with an investment-grade tenant.”
Hillshire is a leader in various meat products sold within the retail and foodservice markets. Hillshire offers its products primarily under the Jimmy Dean, Ball Park, Hillshire Farm, State Fair, Sara Lee and Chef Pierre brand names, as well as artisanal brands, such as Aidells and Gallo Salame.
With this transaction, CCIT’s investment portfolio consists of 27 wholly owned properties in 15 states, totaling approximately 4.6 million square feet with a purchase price of approximately $731.1 million. The overall weighted average credit rating of the rated tenants in the portfolio is A-, and the weighted average remaining lease term is nearly 11 years. More than 65 percent of CCIT’s portfolio consists of tenants rated by Standard & Poor’s, and of those tenants more than 88 percent are rated investment grade.