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With a $2-billion war chest, TrizecHahn Corp. is preparing to add to its portfolio of office properties, negotiating two separate deals to buy three Chicago buildings, including One IBM Plaza.
In one deal, worth about $525 million, the Toronto-based real estate company-whose office division is based in Chicago--is negotiating with Blackstone Real Estate Advisors Inc. to buy the 1.3-million-square-foot IBM building; 225 N. Michigan Ave., with 900,000 square feet of office space, and National City Center, a 784,000-square-foot office building in Cleveland, sources say.
The negotiations could pave the way for a larger agreement between TrizecHahn and the New York-based investment bank, which last month began marketing a 13-building portfolio of office properties worth as much as $2 billion, sources say.
Separately, TrizecHahn is negotiating to pay more than $100 million for 33 W. Monroe St., an 843,000-square-foot building that is owned by a partnership managed by Draper & Kramer Inc., sources say.
"TrizecHahn's strategy is to buy high-quality office buildings at discounts to replacement cost," says Jim Sullivan, senior analyst with Newport Beach, Calif.-based Green Street Advisors Inc., whose clients are institutional investors. "But a sophisticated player like Blackstone is going to get top dollar."
And pay...