Sterling Bay buying John Hancock Center offices for $300M+

The Chicago developer already spent almost $1.2B this year on Prudential Plaza, Groupon HQ

TRD CHICAGO /
Jul.July 13, 2018 09:00 AM

Sterling Bay’s Andy Gloor and shots of 875 North Michigan Avenue (Credit: Sterling Bay, 875North MichiganAvenue, and Pinterest)

Sterling Bay is buying the office and parking portions of the former John Hancock Center for more than $300 million, the latest in its string of blockbuster downtown office acquisitions.

The Chicago-based firm and an unnamed partner are under contract to buy the 900,000 square feet of offices on floors 13 to 41 of the 100-story tower at 875 North Michigan Avenue, along with 700 parking spaces on floors 4 to 12 from Chicago developer Hearn, according to Crain’s.

Sterling Bay paid $510 million in February for the Groupon headquarters at 600 West Chicago Avenue from Equity Commonwealth and closed on its deal to buy Prudential Plaza from 601W Companies for $680 million this spring.

The Michigan Avenue tower recently lost the John Hancock name after the insurance company asked that it be removed from the building. Its offices are 90 percent leased, according to CoStar, with ad agency DraftFCB its largest tenant. The overall downtown office occupancy rate is around 87 percent, according to a recent CBRE report.

Representatives of Sterling Bay and Hearn could not be reached, nor could Eastdil Secured, which was hired last year to sell the building’s offices and parking.

Hearn paid $140 million for the office and parking condos in 2013 and took out a $150 million loan on the property at the time. Hearn said last year that the owners spent about $69 million in upgrades to the building since then.

The latest office acquisition for Sterling Bay comes as it’s ramping up plans for the massive Lincoln Yards development along the North Branch of the Chicago River. It also continues to be one of the most active developers in booming Fulton Market, where it has a number of office and hotel projects.[Crain’s] — John O’Brien

 

Related Articles

arrow_forward_ios
Renderings of Millennium on LaSalle  

This office-to-luxury rental deconversion just got a big loan

Thor Equities CEO Joe Sitt and a rendering of 800 West Fulton Market (Credit: SOM)

Thor Equities lands $144M construction loan for new tower

Flexport CEO Ryan Petersen and 333 N. Green Street (Credit: Getty Images, Sterling Bay)

Sterling Bay inks tech firm to latest lease at Fulton Market HQ

Chicago Skyline (Credit: iStock)

Windy City’s real estate blown away by other cities

President Donald Trump, Trump International Hotel & Tower 401 N. Wabash Avenue and Cushman & Wakefield CEO Brett White (Credit: Getty Images, Cushman and Wakefield)

Trump Tower has new leasing broker for failing retail space

Ald. Daniel La Spata (1st) and 2620 Hirsch Street in Humboldt Park (Credit: Google Maps)

RBH Group faces setback in its Teachers Village resi project

Freehand Hotel and Queensgate Investment Company CEO Jason Kow

Queensgate lands $44M acquisition loan on hip Freehand Chicago hotel

The Ramova Theatre and Ald. Patrick Daley Thomson (11th) (Credit: iStock)

A real estate encore for the Ramova Theatre

arrow_forward_ios