Duke, Simon Close $257M Office Sale

ROSEMONT, IL-Duke Realty Corp. has paid $257 million for five buildings totaling 1.4 million sf here, acquiring the Riverway and O’Hare International Center from giant retail REIT Simon Properties Group, Inc. The three buildings at Riverway, located at the southeast corner of Higgins and River roads, total 877,000 sf while the other two O’Hare International Center buildings at Higgins and Mannheim roads add up to another 517,000 sf.

The properties have long been on the radar of the office and industrial REIT. Duke Realty Corp. thought it had a deal for the properties in 2002, but Simon Properties Group pulled out to avoid an extra capital gains distribution.

“For a number of years we have been looking for the right position in the O’Hare submarket, which we believe is one of the best long-term submarkets in Chicago because of its central location,” says Duke Realty Corp. chairman and chief executive officer Dennis Oklak, whose company owns a 95,600-sf building in Park Ridge. “The submarket has a very limited supply of land positions for new developments, which should provide an environment conducive to future rental rate growth.”

For Simon Property Group, the assets were non-core holdings, chief executive officer David Simon has said.