The Real Deal Chicago

Here are the top 10 Chicago investment sales of the first quarter

Two major downtown office buildings top the list in deals worth almost $900M
By Scott Klocksin |
Research by Laura Hanrahan
April 17, 2018 04:30PM

600 W. Chicago and One South Dearborn (Credit: Hines)

Starwood Capital and Slate Office REIT made their entries into the downtown Chicago office market during the first quarter, with the No. 2 and No. 3 sales of the quarter, respectively.

The market for office investment sales had a strong start to the year, with more than $1.2 billion in deals, according to a report by NKF, which notes that 2015 was the only year in the past four in which office sales downtown hit the 10-figure mark.

Even outside of the few marquee deals, the quarter saw some significant properties change hands, including a hotel still under construction in the booming Fulton Market neighborhood, a would-be data center site scooped up by one of the city’s most significant office building owners and the largest condo deconversion in town to date.

Take a look at the full list, and stay tuned for more quarterly and monthly rankings like this one.

1. $510 million

Property: 600 West Chicago Avenue
Buyer: Sterling Bay
Seller: Equity Commonwealth
Seller’s broker: Eastdil Secured

Sterling Bay tops the list of buyers with its pickup of the 1.4 million-square-foot 600 West Chicago Avenue, home to Groupon’s headquarters, from Equity Commonwealth. The sale was brokered by Eastdil Secured and closed in February.

2. $360 million

Property: One South Dearborn
Buyer: Starwood Capital
Seller: Olen Properties
Seller’s broker: JLL

Barry Sternlicht’s Starwood Capital made its entry into the Chicago market with the January purchase of One South Dearborn, an 833,000-square-foot, Class A office building. Around the time of the closing, the building re-signed its largest tenant, law firm Sidley Austin, to a 575,000-square-foot lease through 2030.

3. $86 million

Property: Two First National Plaza, 20 South Clark Street
Buyer: Slate Office REIT
Seller: EXAN Capital JV Allegra European Holdings
Seller’s broker: N/A

The 31-story, 380,000-square-foot office building would be the first in the U.S. office market for Toronto-based Slate, according to Crain’s.

4. $60 million

Property: Century Tower, 182 West Lake Street
Buyer: Golub & Company and USA Real Estate
Seller: Century Tower Condo Association
Seller’s broker: N/A

In the largest condo deconversion yet in Chicago, the 292-unit Century Tower in the Loop sold in February. The sale price works out to about $205,000 per unit.

5. $50 million

Property: Midpointe, 4050 West 115th Street
Buyer: Bridge Investment Group
Seller: Castle Lanterra Equity
Seller’s broker: Berkadia

This 427-unit apartment complex in the Mt. Greenwood neighborhood on the far Southwest Side of the city sold in late February. Castle Lanterra Equity bought the complex in April 2014 for $28.5 million, according to Commercial Observer.

6. $43 million

Property: WeWork Fulton Market, 200 North Green Street
Buyer: Randy Rissman
Seller: AJ Capital Partners, Shapack Development, WeWork and Shorenstein Properties
Seller’s broker: Eastdil Secured

WeWork occupies about 77,000 square feet in the building, which sits in the heart of the Fulton Market district, where Shapack has several other properties, including 801-811 West Fulton Market and the Parker Fulton Market, a 29-story luxury rental tower that opened in 2016.

7. $34 million

Property: 717 South Desplaines Street
Buyer: 601W Companies
Seller: Ascent Corp.
Seller’s broker: Ladder Capital

This 4.5 acre site was slated for development as a data center when Ascent Corp. bought it for $27 million about five years ago. 601W Companies, which is redeveloping the nearby Old Main Post Office into Class A office space also recently bought other sites in the immediate area, including a parking lot at 527 South Clinton Street for $10 million.

8. $23 million

Property: 120 East Oak Street
Buyer: L3 Capital
Seller: Private seller
Seller’s broker: Mid-America RE Group

The property sits on one of Chicago’s priciest retail strips and currently houses a branch of Northern Trust Bank.

9. $15 million

Property: Nobu Hotel, 854 West Randolph Street
Buyer: RCD Hotels
Seller: M Development
Seller’s broker: Conlon Commercial

News broke late in 2017 that Mark Hunt’s M Development would sell the hotel, which is under construction and is expected to open before the end of this year.

10. $15 million

Property: 400 North May Street
Buyer: MCZ Development Corporation
Seller: Lech Losiowski
Seller’s broker: SVN

According to the Chicago Tribune, the asking price for this 75,000-square-foot loft office building was $17.5 million. It hit the market about a year ago.
Source: The Real Deal analysis of Chicago sales transactions identified as closed in Real Capital Analytics’ database between Jan. 1 and March 31.