Beacon Capital Partners sells 50 Percent Stake in Chicago Building

1 N. Dearborn St. (Photo courtesy CoStar via Crain's Chicago)

BOSTON– Beacon Capital Partners, a Boston-based real estate investment firm, has sold a 50 percent stake in the Chicago Public Schools headquarters, Crain’s Chicago newspaper reported.

Beacon Capital had bought the stake in the downtown Chicago building just more than two years ago.

“Beacon Capital Partners sold a 50 percent stake in the Chicago Public Schools headquarters at 1 N. Dearborn St. to a joint venture of New York-based MetLife and the New York State Common Retirement Fund” reported Crain’s, quoting a source familiar with the deal. “Neither party disclosed the price, but industry research company Real Capital Analytics reported the joint venture deal valued the 17-story building at $283 per square foot. That would imply a $266 million value for the 940,000-square-foot building.”

Crain’s said that at that price, the deal would mark a hefty return for Beacon, which paid $203 million for the vintage building in October 2015, Cook County property records show.

“Beacon financed that acquisition with a $152 million loan and has since given the property a major facelift,” Crain’s reported.

1 N. Dearborn St. (Photo courtesy CoStar via Crain’s Chicago)

The newspaper quoted a Beacon spokesman as saying that the company spent about $22 million over the past two years adding various amenities, including a penthouse lounge, conference center, outdoor deck and fitness center, as well as infrastructure improvements.

1 N. Dearborn, which Beacon will continue to manage under the new ownership structure, is 93 percent leased. That’s a higher occupancy rate than the 86.7 percent average for the Central Loop as of the end of 2017, according to brokerage CBRE.

Beacon Capital Partners is a tenant-focused private real estate investment firm with a 70-year legacy of successful real estate development, ownership and management. Beacon invests in high-quality office properties in core urban markets with highly-educated workforces. Beacon has raised eight investment vehicles totaling over $12 billion in equity since 1998 from a diverse investor group including endowments, foundations, public, private and foreign pension funds, financial institutions, and sovereign wealth funds. This equity has fueled 150+ office investments with a projected total value of approximately $30 billion, according Beacon Capital website.