chicago-condos Dave on 25 Feb 2008 05:35 pm

$540 million bid for UBS Tower

While many deals for major office towers around Chicago have fallen through in recent months, Hines Interests L.P. has agreed to pay $540 million for the UBS Tower.

The deal would be the largest for any commercial space in Chicago for the year, and is welcome news for a market that has been hard hit by problems in the credit market.  Commercial real estate deals in recent years have been characterized by highly leveraged financing.

However, a turbulent credit market has led many banks and lenders to tighten requirements for new deals, often requiring real estate funds to put up a larger percentage of the equity.

UBS Tower is owned by Deutsche Bank.  The company put the tower on the market in September, in what was seen as one of the biggest tests of the strength of the downtown Chicago commercial real estate market.  The building is currently about 70 percent leased.

The market for Chicago Condos has also been hit by a drop in sales in recent months.  However, several new luxury developments are opening their doors this year, and sales have remained relatively strong in the area as retirees trade in their suburban homes to enjoy an urban lifestyle in a renewed downtown.  .

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