Newmark Grubb Knight Frank (NGKF) has completed the sale of a triple net ground lease located at 137 S. State Street, the Property, for $7,100,000 on behalf of the seller, a local family trust. The Property was sold to a California-based private investor at a record low cap rate of 3.1%, setting an all-time low for comparable ground lease sales.
NGKF’s Geoffrey Kasselman, SIOR, LEED AP, executive managing director and head of NGKF’s national industrial practice, led the brokerage team representing the seller of the NNN ground lease along with Senior Managing Director Andy Gallas and Managing Directors Gino Tabbi and Boris Shraybman.
Situated on .26 acres at the corner of State Street and Adams Street in the Loop, the Property is occupied by a four-story, 50,530-square-foot cooling plant operated by building owner Enwave Energy Corporation, a division of Brookfield Infrastructure Partners, L.P. The ground floor of the property is leased to CVS Pharmacy with floors two through four reserved for the plant’s chillers, pumps and ice machines. The plant provides chilled-water cooling services to over a hundred commercial buildings throughout the Loop via an underground network of pipes.
With its strategic use and heart-of-the-Loop State Street location, the Property offering represented a unique opportunity to acquire a long-term ground lease on a premier in-fill location. The ground lease extends through December 2043 and the tenant has a one-time, forty-nine year lease option.
Kasselman, Gallas, Tabbi and Shraybman, along with Reuben Warshawsky and Charles Byrum of the law firm of Meltzer, Purtill & Stelle LLC represented the seller in the transaction.