The Real Deal Chicago

Sterling Bay closes on $680M acquisition of Prudential Plaza

Deal marks Chicago's largest office building sale since 2015
By Scott Klocksin | April 04, 2018 12:00PM

Prudential Plaza and Sterling Bay's Andy Gloor

Prudential Plaza and Sterling Bay’s Andy Gloor

Sterling Bay has closed on a $680 million purchase of Prudential Plaza, the massive two-building complex at 130 East Randolph Street, a source close to the deal has confirmed.

The deal closed Tuesday, according to another source with knowledge of the acquisition. It marks the largest office building sale to close in the city since 2015.

As first reported by the Chicago Tribune, Sterling Bay had been pursuing a deal at the 2.3 million-square-foot complex for several months.

The closing has been held up by a lawsuit involving Wells Fargo and U.S. Bank.

In the suit, the banks contend that the ownership group, which included 601W Companies and Berkley Properties, failed to disclose pending leasing activity at the buildings that would have increased the property’s net operating income by $5.8 million and valued the asset considerably higher.

Wells Fargo and U.S. Bank did not immediately return requests for comment.

The acquisition is the largest ever by Sterling Bay—by a good margin. The firm has made its name largely by repurposing assets outside the city’s downtown core. It recently closed on 600 West Chicago Avenue for $510 million, which was previously its priciest buy.

As stewards of the building, 601W Companies inked several prominent leases, including the headquarters of Wilson Sporting Goods and a 72,000-square-foot deal for law firm Clark Hill, which brought the firm from a neighboring building and nearly doubled its footprint in downtown Chicago.

Sterling Bay’s website has the property on its website, along with leasing information, describing itself as the “contract purchaser” of the property. Leasing information accompanies the post on the site.

601W Companies also recently closed on an $88 million loan for a financially troubled office building at 550 West Jackson in the West Loop, and closed on the purchase of the 833,000-square-foot office portion of 1 South State Street for $178 million, as first reported by The Real Deal.