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.
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