Chicago’s office market is emerging from the doldrums of the financial downturn as more U.S. and overseas investors seek high-quality properties in a gateway market that’s evaded the cap rate compression experienced by cities such as New York and Los Angeles. “Chicago is the cheapest gateway market in terms of rental rates and price per pound to buy offices,” said Ariel Bentata, co-founder and managing partner of Beacon Investment Properties.

Beacon recently acquired 200 West Monroe, a 23-story, Class A office tower (REFI, 5/23) for about $100 million, or about $187 per square foot. “Even though that’s a high number now, the 200 West Monroe deal may look good in hindsight,” said Michael Lirtzman, executive v.p. of Transwestern. “There will be eye-opening numbers to come based on what we’ve heard for 1970s and 80s vintage buildings.” ....

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