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Mirae’s Chicago challenge: Sell an office tower when no one’s buying
Over a dozen other downtown office towers on the market, and buyers are unsettled by a forthcoming reassessment
Buyers of downtown office properties in Chicago are spoiled for choice, and now there’s even more product to choose from.
South Korean investor Mirae Asset Global Management has put 225 W. Wacker Drive on the market for $245 million, according to Crain’s. It’s priced at about $370 a square foot, a premium in downtown Chicago, where office rents are rising but so are concerns over a forthcoming reassessment.
The asset manager put the building on the block two years ago but later removed it from the market. Mirae bought the 30-year-old property in 2013 for $218 million, according to Crain’s.
The building likely won’t appeal to value-add investors, since the property is already 96 percent leased to 27 tenants, including Cushman & Wakefield and PPM America.
According to a July report by MBRE, 16 downtown office buildings were on the market, with five others under contract. Only one building traded during the second quarter, a petite 19-story Loop property that went for just $22 million. It was the slowest investment-sales period in 20 years.
Tom Smith, co-founder of office leasing brokerage Truss previously told The Real Deal that some downtown office landlords are looking to cash out while leases are still on the books.
“We’re seeing a big geographic switch away from the Central Loop and focused heavily on Fulton Market and River North,” he said. “This is getting in front of that demand change. They want to sell while they still have that occupancy, still have that cash flow.” [Crain’s] — James Kleimann