je bramson & jaime fink are licensed real estate executive
TRANSCRIPT
Jeff Bramson & Jaime Fink are licensed real estate
brokers in the state of Illinois, along with Holliday
Fenoglio Fowler, L.P. (collectively "HFF"). EXECUTIVE SUMMARY
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HFFis pleased to present the 100% fee-simple interest
in 540 West Madison (the “Property”), a 31-story,
ultra-core, Class A Trophy Office Building (LEED-
EB Platinum certified) located in Chicago’s West Loop submarket.
The 1,094,339 rentable square foot tower was developed by
Hines in 2003 and stands as one of the most technologically
advanced office properties in Chicago. The Property is currently
97.2% leased to a desirable mix of globally prominent, high credit
tenants and offers approximately 10.7 years of weighted average
lease expiry ("W.A.L.E."). 540 West Madison offers investors
the rare combination of unparalleled infrastructure, premium
location, outstanding amenities and timeless asset quality.
KEY PROPERTY STATISTICSAddress: 540 West Madison
City, State: Chicago, IL
Year Built: 2003
Rentable Area: 1,111,921
Notable Tenants: Bank of America (S&P: A-)
DRW Investments
Marsh (S&P: A-)
Number of Stories: 31
Occupancy: 97.2%
Typical Floor Plate: 41,400-67,800 RSF
Developer Hines
Finished Ceiling Height: 9'6"
Slab-to-Slab Ceiling Height 13'
Walk Score: 98/100
Transit Score: 100/100
Parking: 266 in private below grade garage
EXECUTIVE SUMMARY
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A ONE-OF-A-KIND GLASS SCULPTURE, "LIGHT TWISTER" BY LIBOR SOSTAK OF LASVIT, HANGS FROM THE MEZZANINE LEVEL WELCOMING GUESTS. THIS EXEMPLIFIES THE MODERN, BRIGHT AND AIRY IMAGE OF THE BUILDING
“LIGHT TWISTER”
EXECUTIVE SUMMARY
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Long-Term Durable Cash Flow
540 West Madison tenant roster provides exceptional income
stability, with minimal rollover risk, due to its balanced lease
expiration profile. The Property features approximate W.A.L.E. of
10.7 years providing a secure and protected income stream. The
largest tenant, the Bank of America (S&P: A-) recently expanded
within the building to accommodate growing operations for and
re-affirmed the bank's long-term commitment to the building,
extending its lease through December 2032. The balance of
the Property's highly desirable tenancy features prestigious and
internationally renowned firms including DRW Investments , Marsh
(S&P Wireless, and Marsh USA to name a few. The quality of the
tenant roster coupled with the balanced rollover schedule make
this an attractive stable investment for core investors desiring
superior cash flow with minimal rollover exposure in a location
with extraordinary residual value.MAIN LOBBY
SUMMARY OF PRIMARY TENANTS
COMPANY INDUSTRY RSF %
CURRENT OFFICE NET
RENT/RSF EXPIRES W.A.L.E.
Bank of America (S&P: A-) [1] Banking 414,093 37.2% $27.82 Dec-32 14.8 Yrs
DRW Investments Financial 129,312 11.6% $30.46 Dec-29 11.8 Yrs
Marsh USA (S&P: A-) Insurance 120,771 10.9% $26.67 Feb-24 5.9 Yrs
Valance Health [2] Health Care 83,521 7.5% $26.00 Dec-27 9.8 Yrs
SAC Wireless Technology 83,228 7.5% $28.51 Jun-25 7.3 Yrs
Total 830,925 74.7% $27.95 11.8 Yrs
[1] Total RSF includes phased right-size and expansion space through 2018-2021[2] Total RSF excludes 41,484 RSF of giveback space as of 6/30/2019 to be backfilled by BofA
EXECUTIVE SUMMARY
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The Evolution of Institutional Grade Tenancy
The Property features an exceptional first-class tenancy that is consistent with the trophy quality
of the building. Developed by Hines in 2003, the Property was constructed to be the Chicago
headquarters for ABM-AMRO, at the time the parent company of LaSalle Bank. The construction
for this user built office tower was $457 per RSF. After being purchased by Bank of America in
2007, the tenant has gone through a right sizing and subsequent expansion exercise within the
building leaving only their most critical operations. Today, 540 West Madison is home to Bank
of America’s Merrill Lynch Wealth Management Division as well as mission critical lockbox and
datacenter operations. These key divisions of the bank are dependent upon the surplus power
and infrastructure redundancy that only 540 West Madison can provide.
Large, nearly column-free floor plates, floor-to-ceiling windows, and incredible infrastructure have
ensured the Property’s status as one of the most technologically advanced and efficient buildings
in Chicago. The Property’s exceptional design has ensured that high quality tenants continued to
fill its roster.
EXECUTIVE SUMMARY
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6TH FLOOR ROOF TOP DECK
EXECUTIVE SUMMARY
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State-of-the-Art, Headquarters Quality Infrastructure
The trophy tower incorporates the latest in office high-rise building design including efficient, large
virtually column-free floorplates ranging from approximately 67,800 RSF on the lower floors and
approximately 41,400 RSF in the upper tower. The building façade features nine-foot-six-inch floor-
to-ceiling windows that maximize natural light in tenant spaces, while the Property’s electricity is fed
through dual sub stations providing redundant power and includes a 400KW backup generator. The
Property is equipped with a state-of-the-art, raised floor design allows for air distribution beneath
each floor for heating and cooling, which can be controlled on a floor-by-floor basis to further
conserve energy and after-hours HVAC costs. 540 West Madison is one of two buildings in the entire
city of Chicago with this above standard HVAC system, the Citadel Center at 131 South Dearborn
being the only other building able to make this claim.
540 West Madison has achieved LEED-
EB Platinum certification through
the Property’s many environmental
initiatives. The Property features
a luxuriously landscaped green roof
complete with water cisterns feeding directly
to the city’s storm sewer to help aid in rain water
management and heat gain. Also found on the
green roof are three urban beehives. The hives
provide an urban home to the hundreds of bees
pollinating agricultural and horticultural crops
while sustaining the food supply chain. These
sustainable features along with significant fiber
connectivity, advanced fiber-optic technology
and full-amenity package help underscore an
institutionally-managed environment.
FRONT ENTRANCE
EXECUTIVE SUMMARY
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Best Infrastructure in Chicago
540 West Madison stands out as one of the most technologically advanced office buildings in
Chicago with extensive on-site Uninterruptable PowerSupply and Emergency Power Supply
systems, a 65,000 square foot data center, electrical service from eight separate 12 kV feeds from
five independent Commonwealth Edison (ComEd) substations and an on-site generator farm housing
seven Caterpillar 2,000 kW generators. The building could lose service from up to three substations
and still be fully operational on utility power, and in the extremely rare case of service interruption,
the Property has the capacity to maintain power for critical functions for up to 72 hours via its on-
site generator farm. This fully redundant infrastructure system not only provides tenants with 99.982
percent reliability, but also offers tenants significant cost savings as they may not require additional
infrastructure to meet their technology requirements. Furthermore, excess riser, electrical, cooling
and mechanical capacity create an environment with engineering flexibility. As detailed in the table
below, 540 West Madison stands apart from its competition, even the most recent developments in
the city, as the only building in the Chicago market that can provide this level of modern, advanced
and dependable infrastructure. This serves as a significant competitive leasing advantage and an
opportunity to charge premium rents for this highly desirable and unique space.
INFRASTRUCTURE COMPARISONBUILDING INFRASTRUCTURE FEATURES 540 WEST MADISON CLASS A OFFICE
Cost of Construction (2016) $670 per RSF $532 per RSF
Power Capacity 8 Watts per RSF 8 Watts per RSF
Electrical Feeds/Substations 8 feeds / 5 substations 3 feeds / 3 substations
Telecom Paths 6 feeds 2 feeds
Back Up Power 7 Generators / 14 megawatts 1 Generator / 2 megawatts
Electrical Risers 2 1
Uninterruptable Power Sources 3 Units / 12 Kva None
Operational Hours during Blackout 48 hours None
HVAC Under Floor Air Distribution Ducted Overhead Distribution
1 Based on Chicago CBD Class A tower deliveries from 2003 to present
EXECUTIVE SUMMARY
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Supersized Set of Amenities
Since acquiring the Property in 2013 the Seller has invested
over $3.3M in capital expenditures including a new fitness and
conference center on the second floor as well as cosmetic lobby
improvements. Other building amenities include a 266-space
indoor heated garage and a retail spaces that feature a café,
Starbucks and white table cloth restaurant. 540 West Madison’s
exceptional location, access to public transit, sustainable design,
superior amenities and unsurpassed infrastructure contribute to
its prominence within the Chicago office market.
Premier West Loop Location
540 West Madison is well-positioned in the heart of the West-
Loop, Chicago's most dynamic and fastest growing submarket.
The West Loop submarket contains over 40 million SF of Class
A and B office space equating to 37% of the total Chicago CBD
inventory. With available office stock and great access to public
transportation, the West Loop is the preferred location for office
tenants. Accordingly, the submarket has a high concentration
of office using employment, and benefits from the multitude of
finance, insurance, real estate and business services jobs.
The West Loop is the most prominent location home to major
corporations such as Boeing (Global Headquarters), Deloitte &
Touche, Hyatt (Global Headquarters), PriceWaterhouseCoopers,
UBS, MillerCoors, Orbitz, USG Corporation, R.R. Donnelly, United
Continental, Chicago Mercantile Exchange, CDW Corporation,
Citicorp, Ernst & Young, Hewlett Packard, Mayer Brown, PepsiCo/
Quaker Oats, and Scudder/Kemper Financial.
EXECUTIVE SUMMARY
11 EXECUTIVE SUMMARY
WEST LOOP
Ogilivie Transportation Center
Union Station
94 94
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540 West MadisonA Property in the Middle of it All
77%OF ALL SUBURBAN COMMUTERS
Use Ogilvie Transportation Center or Union Station
130,000DAILY COMMUTERS
Union Station
106,000DAILY COMMUTERS
Ogilvie Transportation Center
EXECUTIVE SUMMARY
WEST LOOP
Ogilivie Transportation Center
Union Station
94 94
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West Loop/Transit Hub Location
540 West Madison’s irreplaceable location has helped create
a dynamic, in-demand, trophy asset that has appeal to tenants
from a wide array of industries. Located in the vibrant West Loop
submarket, the Property sits on a 2.95 acre site encompassed
by a full city block bordered by Washington Boulevard to the
north, Madison Street to the south, Clinton Street to the east
and Jefferson Street to the west. Providing virtually unmatched
access to suburban trains (Metra), 540 West Madison is positioned
directly across Clinton Street from Ogilvie Transportation Center,
the terminus for three Metra routes operated by Union Pacific. The
UP North, Northwest and West lines handle more than 102,000
commuters each weekday (arrivals and departures). These lines
service the majority of Chicagoland’s most affluent suburban
communities. Union Station, the nation's 3rd busiest train
station, handles nearly 130,000 passengers each weekday and
is a quick two block walk from the property. Planned renovations
of Union Station will provide the hub with a 110,000 square foot
food hall, additional office space, hotel rooms, and two 12 story
residential structures. This will increase the traffic through the
already dynamic 540 West Madison location. Furthermore, 540
West Madison is situated just two blocks east of the Kennedy
Expressway (Interstate 90/94) and the Eisenhower Expressway
(Interstate 290) which provide access to every other major
Chicago expressway. The Property also provides convenient
access for urban commuters due to its proximity to the Chicago
Transit Authority’s (“CTA”) train and bus system. 540 West
Madison’s exceptional location and accessibility contribute to
its prominence within the Chicago office market.
EXECUTIVE SUMMARY
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Premium Investment Opportunity
540 West Madison presents the opportunity for an investor
to acquire a premier investment within the most desirable
submarket of the Chicago CBD. The combination of institutional
anchor tenancy, exceptional rollover profile, best-in-class
infrastructure and premier location ensures stability of cash
flows to a future investor. Furthermore, the proximity to both
major commuter rails as well as local public transit and buses
make easy commutes for both North Shore executives and
River North associates alike, securing the Property as a bedrock
corporate headquarters location.
EXECUTIVE SUMMARY
15 EXECUTIVE SUMMARY
Investment ContactsJEFFREY M. BRAMSONSenior Managing Director/Managing [email protected] #471.009696
JAIME M. FINKSenior Managing [email protected]
BRYAN D. [email protected]
PATRICK M. [email protected]
SAM M. [email protected]
Debt ContactCHRISTOPHER S. CARROLLManaging [email protected]
HFF CHICAGO181 West Madison | Suite 3900Chicago, IL 60602Telephone: 312.528.3650Fax: 312.528.3651
©2017 Holliday Fenoglio Fowler, L.P., HFF Real Estate Limited (collectively, “HFF”), HFF Securities L.P. and HFF Securities Limited (collectively, “HFFS”) are owned by HFF, Inc. (NYSE: HF). HFF and its affiliates operate out of 25 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment advisory, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF.
HFF has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than HFF and we make no representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all references to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a buyer. Buyers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.
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