One of Chicago’s many office towers for sale is scooped up

Spear Street Capital in contract to buy 46-story skyscraper on W. Monroe Street

500 W. Monroe (Credit: Google Maps)
500 W. Monroe (Credit: Google Maps)

Maybe this will kickstart the painfully slow investment sales market in downtown Chicago.

Spear Street Capital is under contract to buy the 46-story, 967,00-square-foot skyscraper at 500 W. Monroe from Georgia-based Piedmont Office Realty Trust, Real Estate Alert reported this week. While the sale price is unknown, bids reportedly ranged from $415 million to $425 million, putting the sale price somewhere around $440 a foot.

Piedmont initially sought upward of $490 million for the building when it was put on the market in May. Though that price may not have been met, it looks certain that Piedmont will turn a tidy profit. Piedmont, which was once the mezzanine lender on the property, took full ownership in 2011 at foreclosure auction, valuing the property at just under $228 million at the time.

The deal could mark a turning point for downtown investment sales, which have been slow in 2019, in large part due to an upcoming reassessment.

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The deal at 500 W. Monroe marks the first recent sale among several downtown investment listings that went up since last January — including Angelo Gordon & Co.’s Citadel Building and AmTrust’s $1.3 billion, seven-property portfolio.

It appears Spear Street Capital was more interested in a turnkey property than a value-add project. In this case, Piedmont spent about $84 million in renovations and brought the occupancy level up to near capacity.

Spear Street Capital has interests in about two dozen office properties throughout the U.S., Canada and Europe. [Crain’s, REA] — Kelsey Neubauer