Business Services Industry
Deal to ditch HQ lets Burnett dump debt. (Leo Burnett Co.)
Crain's Chicago Business, October, 1997 by Strahler, Steven
Leo Burnett Co. isn't the first - or last - tarnished industry leader to ditch trophy real estate to refocus on core operations. But unlike asset-rich exemplars such as IBM Corp. or AT&T Corp., the ad agency won't have the hard collateral to ease access to capital it needs to stay private, independent and growth-oriented.
The firm last week said it would "sell" majority ownership in its 50-story Wacker Drive headquarters to affiliates of Starwood Capital Group LLC and the building's Chicago-based developer, John Buck Co. What actually happened, according to people familiar with the transaction: Burnett got rid of its $217-million mortgage (from Citicorp Real Estate Inc.) and gave up its ownership interest. "Removing that (debt) from our balance sheet clearly puts...
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