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Sophistication

CASE STUDY

One & Two Prudential Plaza

CAPITALIZING WHILE SERVING AS THE WHITE KNIGHT

SEEING THE DIAMOND
IN THE ROUGH

For 601W and its investors, sophistication means understanding that there is no detail too intricate, no resource beyond reach, and no line item too insignificant to consider. Sophistication means having the knowledge, instincts, and experience to pursue, acquire, and structure a deal, even one of great complexity.

SUCCESS STORY

PROCEEDS FROM SALE $237 MILLION

SOLD

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130 E. RANDOLPH ST. & 180 N. STETSON AVE. CHICAGO, IL

  • SQUARE FOOTAGE 2.3M
  • PURCHASE PRICE $421M
  • CASH INVESTED $85M
  • SALE PRICE $680M
  • RETURN ON INVESTMENT 37% PA
  • HOLDING PERIOD 58 MOS

The Prudential Plaza in Northeast Chicago was once a magnificent and iconic office structure with continuous mid-90% occupancy comprised of top tier tenants. But when the former owner fell on difficult times, so did his ability to maintain the Property and retain those tenants. As the vacancies increased, the sizeable mortgages went into default. Seizing an opportunity in a city 601W knows very well, its principals structured an outstanding workout with several debt holders over an 18-month period of complex negotiation. 601W negotiated dramatically improved loan terms with the mortgagees and took control of the Property (which had been valued at $650 million just five years earlier) with an $85 million cash investment for its planned building-wide renovations, in order to attract and lease the Property to high-caliber, new-media tenants. This “workout” allowed 601W and its investors to potentially realize tremendous profits in a preferred position to much of the restructured and reduced debt. Within two years of its acquisition of Prudential, 601W completely repositioned the building with a stunning new lobby, new windows and elevators, an amenities floor, and a spectacular rooftop deck. Over a 24-month period, 601W leased over 700,000 square feet to many new media, technology, and creative firms, and established Prudential Plaza as one of the preeminent properties in Chicago for cutting-edge office space. This 60 year-old asset that 601W transformed into a trophy property was purchased for $421 million and then sold for $680 million, providing a very significant return to its investors.