The Real Deal Chicago

Here are the top 5 Chicago office investment sales of December

The list includes deals in River North, Evanston and the West Loop totalling more than $504M
By Alex Nitkin |
Research by Haru Coryne
January 15, 2019 03:00PM

From top left, clockwise: 444 N Michigan Avenue, One South Wacker, 118 S Clinton Street, and 500 Davis Street (Credit: 42 Floors, LoopNet, and iStock)

601W Companies cemented its status as one of the city’s top office owners with its $310 milion purchase of a Wacker Drive high-rise last month, by far the priciest sale recorded for any Chicago-area office building in December.

Marked down from a $370 million asking price, the building was an aberration in the surging class-A office market, where sharp job growth and Downtown relocations are keeping office rents afloat despite new inventory and tenants increasingly looking to consolidate space.

The list also includes two sales in the West Loop, where new office construction is steadily pulling companies from the Loop and River North. And the No. 3 sale shows how quickly demand for office space has skyrocketed in Evanston, where commercial vacancy dropped below 10 percent.

The five sales combine for $504 million in total transactions. All prices are calculated from Cook County property records.

1 South Wacker Drive | $310 million

Manulife John Hancock took a $34 million loss on the Helmut Jahn-designed tower at 1 South Wacker Drive when it accepted $310 million from New York-based 601W Companies. The 40-story building was just 76 percent leased last year, down from 90 percent when Manulife paid $344 million for it in 2015.

The acquisition adds another high-profile Downtown office to 601W Companies’ local portfolio. The firm also is overseeing the overhaul of the 2.5-million-square-foot Old Main Post Office and the addition of a skydeck to the Aon Center. The firm also bought the Sullivan Center at 1 South State Street for $178 million last year, and it sold the 2.3-million-square-foot Prudential Plaza to Sterling Bay for $680 million.

Toronto-based Manulife reportedly sought up to $370 million for the building when it listed it in May.

The sale was first reported in September, but it closed on Dec. 11, records show.

2. 444 North Michigan Avenue | $138 million

CIM Group grew its small empire at the south end of the Magnificent Mile last month when it paid $138 million to acquire the 36-story office tower at 444 North Michigan Avenue from the Munich-based GLL Real Estate.

The tower, which GLL had paid about $115 million to acquire in 2006 before spending about $13 million on renovations, sits across the street from the historic Tribune Tower, which CIM is now redeveloping into a 163-unit condo building. CIM and its Chicago-based partner, Golub & Company, also proposed building a 1,422-foot-tall skyscraper on the property.

3. 500 Davis Street, Evanston | $32.35 million

Randy Rissman, whose toy company Tiger Electronics was the brainchild of Furby and Giga Pets, bought into the red-hot Evanston office market last month with a $32 million purchase of the 127,000-square-foot building at 500 Davis Street.

Rissman bought the property from New York-based The Family Office, which made off with a 78 percent gain after having paid just $18 million for the building in 2016, property records show. Built in 1978, the complex was last renovated in 2006.

The toy magnate also paid $43 million last year to buy the WeWork-anchored office building at 200 North Green Street in Fulton Market, and in 2017 he paid $75 million for the 30-story office tower at 150 North Wacker Drive.

4. 118 South Clinton Street | $14 million

Maryland-based ASB Real Estate Investments beefed up its West Loop presence with this 72,000-square-foot masonry building, which it bought last month from Walton Street Capital and R2 Companies. The Chicago-based firms in 2016 bought the office building, which includes ground-floor restaurant space, as part of a six-building, $86 million portfolio.

R2 has been increasingly shifting its focus to Goose Island, where it owns multiple properties and moved its headquarters last year.

Capital One provided ASB with a $7.8 million acquisition loan on the South Clinton building, records show.

5. 133 South Ashland Avenue | $9.7 million

Investors Thomas Meador and Robert Judelson made a quick $700,000 return on this 15,000-square-foot West Loop office building two months after they paid $9 million to buy it from Cedar Street Capital in October.

Meador and Judelson closed their sale of the building to the Chicago-based Wirtz Realty Corporation on Dec. 20, records show.