As GlobeSt.com reports, maybe we haven’t seen the last of the office property flips in Chicago

I thought that the blockbuster Equity Office Properties fiasco was going to be the last flipped office property for a while – apparently not.  Perhaps my definition of flip is liberal, but owning a building for 18 months and then turning around and announcing that you are going to sell it sounds a lot like flipping to me.  That’s what Bentley Forbes, owner of Prudential Plaza at 130 E Randolph and 180 N Stetson, is planning, at least according to this GlobeSt.com article that discusses the details of the Prudential Plaza acquisition in 2006 and planned sale scheduled for early 2008.  GlobeSt.com may have the facts, but I’ve got opinions…

What Tenants Need To Know
There are a couple key facts that are worth noting if you are a tenant in this office complex.  First of all, any time the building in which you lease space goes to market, you should know who is selling and who is buying.  It’s also good to know what the terms are.  Because Bentley Forbes plans to continue managing and leasing the office towers, there is less likely to be any major change in management strategy, but that is still up to the majority owner, to be determined.  Secondly, it is always useful to know who the major tenants are in the building you occupy.  Baker & McKenzie occupies 240,000 square feet, well over 10% of the entire complex, and they are in the market with Jones Lang LaSalle.  Personally, I would be amused if they decided to follow Microsoft into the Aon Center (for more details, see my post It’s official – my friends at Microsoft are moving away).  As a tenant, knowing what happens here can significantly impact building vacancy and negotiation leverage when it’s your turn to chat with the landlord.  Make sure that you are prepared and have good representation on your side.

Recycle Equity Some Capital

I didn’t want to be nitpicky, but I do have a thing about grammar, spelling and punctuation.  I’d like to think that CEOs generally have a strong grasp of the English language, so I have yet to comprehend the quote “recycle equity some capital.”  Was the dictaphone not correctly recording enunciation?  I don’t want to fault Gina Kelly, the reporter, or Bentley Forbes CEO David Cobb, so I’m going to chalk this one up to technology.  However, I would appreciate if someone could help me understand the full line from the third paragraph – ‘The sale will help “recycle equity some capital.”’  My brain has been trying to parse that for the last three minutes and I’ve got nothing.

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One Response

  1. Maybe Cobb is a big fan of Zero Wing 😛

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