L.A. Investor Buys Chicago Office Tower

Only a year after selling one of Century City’s most prominent skyscrapers, Los Angeles billionaire and real estate investor Marvin Davis has purchased one of Chicago’s most prestigious office towers.

Financial details of the transaction were not released, but people familiar with the deal say Davis paid about $235 million for 181 West Madison in Chicago. The 50-story tower in the heart of downtown has almost 1 million square feet of space and is close to full occupancy. Tenants include Northern Trust Co., UBS PaineWebber and Lassalle National Bank.

The deal was to have closed a week ago but was postponed after the Sept. 11 terrorist attacks that destroyed the World Trade Center and damaged the Pentagon.

“I think we are doing the right thing,” Davis said. “I believe in this country and the long-term integrity of its economy.”

The 12-year-old Chicago tower, which was designed by noted architect Cesar Pelli, was purchased from a partnership controlled by Yasuda Mutual Life Insurance Co. of Japan.

Davis is regarded as a savvy investor, but some Chicago commercial real estate brokers were surprised that he paid that much in a market that, like others nationwide, has slowed significantly. Rents have flattened in recent months and vacancies have edged up.

“He’s going to have to hold on to that property for a long time,” said John Goodman, a broker with the firm Julien J. Studley Inc. “The price he is paying is a little bit more reflective of the peak rents of 12 to 18 months ago.”

Last summer, Davis sold the 34-story Fox Plaza--featured in the movie “Die Hard”--in Century City to Irvine Co. for an estimated $350 million.