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5 December 2002
Major Lease Renewals: 10 & 30 South Wacker in Chicago
Lend Lease USOT Management Limited, the trustee of the Lend Lease US Office Trust, is pleased to announce the renewal of two significant leases at 10 & 30 South Wacker Drive, the Trust’s landmark property in Chicago. The 10 & 30 South Wacker buildings, which comprise more that 2 million square feet, are owned jointly with Equity Office Properties Trust.
Leases over 478,000 square feet have been signed with the Chicago Mercantile Exchange (CME), the asset’s largest tenant and Banner & Witcoff.
Chicago Mercantile Exchange Inc. is the largest futures exchange in the United States and the second largest exchange in the world for the trading of futures and options on futures. As an international marketplace, CME brings together buyers and sellers on its trading floors and GLOBEX around-the-clock electronic trading platform. CME offers futures contracts and options on futures primarily in four product areas: interest rates, stock indexes, foreign exchange and commodities. The exchange moves about $1.7 billion per day in settlement payments and manages $27.7 billion in collateral deposits. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc.
The CME has been a tenant in 10 & 30 South Wacker Drive since the building was developed in the mid 1980’s.
The firm has renewed and expanded into 445,000 square feet of space at both buildings and will create a new entrance on Wacker Drive. The CME’s current lease, which was due to expire in November 2003, has been renewed for 5 years (with one 4 year option and two 7 year options), on commercial terms in line with the Trustee’s expectations.
Banner & Witcoff, a tenant in 10 South Wacker Drive, have also renewed their existing lease. The lease, which was due to expire in February 2003, has been renewed for a period of 10.2 years over 33,945 square feet.
Mr Michael Lunder, Portfolio Manager for the Trust said “At a time when the Chicago office market is highly competitive as a consequence of new supply, we are pleased to be able to retain such high quality tenants. This leasing further demonstrates the quality of our asset within the Chicago market and its capacity to attract and retain leading tenants and maintain high levels of occupancy.”
The CME is the largest tenant in 10 & 30 South Wacker Drive and represents 20% of the building’s leasable area. Banner & Witcoff represents a further 2% of leasable area. The successful conclusion of these negotiations has significantly reduced the asset’s lease expiry in 2003 from 36% to 14% of building area, and also increases the average lease term from 4.2 years to 5.4 years. Retaining the CME confirms the ongoing attractiveness of 10 & 30 South Wacker for the CME’s member firms, who together lease over 244,000 square feet of space (or 12%) at the asset.
Ian Smith, Fund Manager for the Trust said “Our deals with the CME and Banner & Witcoff are good news not only for this asset, but for the portfolio overall. This leasing further increases the average lease term across our portfolio, and significantly reduces the portfolio’s short- term expiry by extending two major tenants in our largest asset. These leases and the reasonably high level of occupancy across the portfolio ensure the Trust remains well positioned to continue to deliver performance for investors.”
Measured on weighted for ownership basis, the CME is the fourth largest tenant in the Trust’s portfolio representing 3% of leasable area. The successful renewal of CME and Banner & Witcoff increases the weighted average lease profile across the portfolio from 5.6 years to 5.8 years and improves the portfolio’s lease expiry profile, with only 8% of space expiring in 2003 and a further 8% in 2004.
Note: Asset and portfolio expiry data is at 30 June 2002, and adjusted for the acquisition of the 50% interest in the First Union Financial Center and the impact of these lease renewals.
For further information please contact:
Donna Byrne
Investor Relations Manager
Lend Lease USOT Management Limited
Ph: (02) 9237 5844
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