CME May Sell Nymex Building05.31.2013
CME Group has enlisted its long-time property advisor Holly Duran Real Estate Partners to explore marketing options for the Nymex building acquired in CME’s August 2008 takeover of the world’s largest energy and metals commodity platform.
Newmark Grubb Knight Frank has been retained to weigh options including the sale and leaseback of the trading floor and other parts of the building, and relocating NYMEX member-traders, staff and facilities to a different site in lower Manhattan, the exchange said in a release.
Holly Duran anticipates the space Nymex acquired in 1997 at One North End in New York, with direct views of the Hudson River, will be desirable for “tech, creatives, and financial services users.”
This isn’t CME first foray in transacting real estate. The Chicago-based exchange company acquired the Chicago Board of Trade in July 2007 and announced the divestiture of its landmark towers at 141 W. Jackson in April 2012. That 1.3 million-square-foot Ceres-capped structure sold for $152 million to a joint venture between GlenStar Properties LLC and USAA Real Estate Company.
CME leased back 150,000 square feet of space for offices and floor support areas for 15 years as part of the deal. The company still owns the adjacent 228,000 square-foot “east building” at 333 S. LaSalle in Chicago, which houses its trading floor. That space has been described as a 60,000-square-foot black box large enough to park a 727 jumbo jet.
More recently, CME purchased the Kansas City Board of Trade in December 2012 and owns a 51% stake in the building and garage of the facility which was put up for sale four months later. The last day of open outcry trading there will be June 28, 2013, the exchange said.
CME acquired the KCBT’s hard asset at a price below replacement cost, with upside potential. There, “rental rates are trending in a positive direction,” one of the brokers, Bryan Johnson of Colliers International, said in a press release. Kansas City has a limited number of similar quality and similarly-priced properties near the downtown area and close to the historic Country Club residential district there, the agent said.
CME has a lease to remain in its headquarters space at 20 S. Wacker Drive in Chicago through 2022. And, it leases office space at 550 W. Washington in downtown Chicago as part of its strategy of diversifying local locations for its operations groups for security and business continuity purposes as well as for cost effectiveness.
Duran has also worked with CME to negotiate leases in Houston, London, Singapore and Northern Ireland.