Prudential Financial Inc. (PRU) has agreed to acquire retail space in the John Hancock Center on Chicago’s Magnificent Mile from North Star Realty Finance Corp., according to two people with knowledge of the transaction.
The second-largest U.S. life insurer has a deal to purchase the shopping component of Chicago’s fourth-tallest building, said the people, who asked not to be identified because the deal hasn’t been announced. The Hancock Center’s 172,000 square feet of retail space is home to stores including Best Buy and The North Face.
The deal marks a step toward North Star’s goal of selling off the tower in pieces after seizing the building this year when a partnership including Goldman Sachs Group Inc.’s Whitehall real-estate unit failed to refinance maturing loans taken out at the height of the property bubble in 2007. North Star, a New York-based real estate investor, partnered with Deutsche Bank AG (DBK) to buy out debt holders and take it over, people familiar with that deal said.
John Chartier, a spokesman for Newark, New Jersey-based Prudential, said he couldn’t immediately comment, and Amanda Williams of Deutsche Bank declined to comment. Joe Calabrese, a spokesman for North Star, didn’t respond to a telephone call and an e-mail seeking comment.
Prudential, the second largest U.S. life insurer, invests in real estate using money that backs policies and funds it raises from third-party investors. The company’s real-estate unit managed $49.1 billion of gross property assets at the end of 2011 and purchased a 20-story office tower in Atlanta in May, according to statements on Prudential’s website.
The Hancock building, completed in 1970, has an observatory on the 94th floor that is one of Chicago’s biggest tourist attractions. In addition to the retail component, the property has 896,980 square feet (83,332 square meters) of office space, a parking garage and 49 floors of residential condominiums.
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