Each week, The Elevator Speech summarizes news related to some of the key industry trends, buildings, deals and dealmakers that shaped headlines. Below are articles that caught our attention the week of May 26.
Shift in Board & Location of REIT
CommonWealth REIT shareholders have voted on a new board that includes Chicago billionaire Sam Zell. Zell has been installed as the chairman of the real estate investment trust and David Helfand as the president, CEO and acting chief financial officer and treasurer. The company’s executive offices have also shifted headquarters from Massachusetts to Chicago, where the REIT plans to employ 75 to 100 people.
Wacker Bankruptcy Case Dismissed
Judge Jack B. Schmetterer is dismissing the bankruptcy case of 123 N. Wacker Drive less than a month after approving its sale, a move which leaves the property at risk of foreclosure. Judge Schmetterer dismissed the Chapter 11 case filed by the building’s largest investor after agreeing with another investor that the bankruptcy petition was filed without his consent. The building’s owners have defaulted on the $122 million mortgage due to insufficient cash flow funds that cannot cover debt payments. The Wacker Drive property was recently appraised at $99 million, well below what is owed on the mortgage.
Huge Debt Amid Tenant Loss
New York-based Dearborn Capital Group, owner of the 1.5 million square foot Citadel Center, must pay back $472 million in debt by the end of 2016. This news comes just months before Seyfarth Shaw LLP, the building’s third largest tenant, ends its lease and vacates about 308,000 square feet. In order to refinance, Dearborn Capital Group will need to fill this vacated space before the loan matures.
Shattered Ledge at Willis Tower
The popular Ledge tourist attraction at the Willis Tower has been closed after reports of cracked glass. The Ledge includes four glass boxes that stick out beyond the tower’s exterior walls, allowing visitors step out into a glass cube. The Skydeck venue on the 103rd floor will remain open, but all glass boxes will be closed off. A Skydeck spokesman said a visitor is believed to have cracked the protective coating on one of the glass boxes with a sharp object. Click here to view a picture that the Chicago Tribune posted on Twitter of the cracked glass.
Chicago Energy Benchmarking Ordinance
The first compliance deadline for the Chicago Energy Benchmarking Ordinance is June 1, 2014. Buildings that must comply by that date include municipal and commercial buildings larger than 250,000 square feet. Benchmarking, verification, and reporting deadlines for additional buildings covered by the ordinance will phase-in through 2016. Under the ordinance, buildings will be required to track whole-building energy use, report to the City annually, and verify data accuracy every three years.
The City of Chicago has established an Energy Benchmarking Help Center and provides phone and email support for all questions related to the ordinance. Live support is available via the hotline Monday-Friday from 9:00am to 5:00pm by calling (855) 858-6878. Email support is available at: Info@ChicagoEnergyBenchmarking.org.
Additional information about the ordinance, including a list of webinars and training sessions, is available at City of Chicago Energy Benchmarking.
What CRE or Chicago news headlines from the past week captured your interest? Leave us a comment and let us know.