Sterling Bay has an agreement to sell an office building on the north-end of its Lincoln Yards megadevelopment for $111 million, a positive sign for Chicago’s sluggish office market.
Apex Capital agreed to buy the 207,000-square-foot property at 1515 West Webster Avenue on behalf of a Middle Eastern capital partner, according to Crain’s. The partner was not named.
The four-story building sits along the Chicago River and is home to the logistics firm C.H. Robinson, which recently signed a 15-year lease at the building.
Sterling Bay tapped Cushman & Wakefield to list the site in early March, just before the coronavirus outbreak, with a projected price of $120 million, according to reports at the time.
Sterling Bay broke ground on the Webster Avenue building before it revealed its plans for Lincoln Yards. The Chicago-based development group paid $21.3 million in 2015 to buy the 4-acre site. It secured an $82.5 million construction loan for the project in 2016, according to Crain’s.
The Webster Avenue sale is the second high profile sale for Sterling Bay in recent weeks. The company also has an agreement to sell its Fulton Market office building that houses the McDonald’s headquarters for about $430 million. The buyer is a family office in Pittsburgh.
Sterling Bay received approval from the city in March 2019 to build the $6 billion mixed-use Lincoln Yards. Plans for the megaproject call for 14.5 million square feet of office, retail and residential space on former industrial land along the North Branch of the Chicago River.
Chicago’s office market has languished since the onset of the pandemic as many office workers continue to operate from home. Available office sublease space in the city reached a record 4.6 million square feet in the third quarter, according to MB Real Estate. The total office vacancy rate climbed to just under 16.6 percent, the highest it’s been in a decade. [Crain’s] — Keith Larsen