Kushner Cos to sell Chicago office tower at sharp discount

Onni Group in contract to pay $188M, far less than its purchase price a dozen years ago

Chicago Archive /
Nov.November 11, 2020 03:51 PM
Kushner Companies, Charlie Kushner and 225 West Randolph Street (Credit: Chris Hondros/Getty Images, and Kushner Companies)

Kushner Companies’ Charlie Kushner and 225 West Randolph Street (Credit: Chris Hondros/Getty Images, and Kushner Companies)

UPDATED, November 12, 4:37 p.m.: Kushner Companies is close to a deal to sell its lone Chicago office building for $188 million, a significant discount from what the firm paid for the property over a dozen years ago.

Kushner will sell the 853,000-square-foot building at 225 West Randolph Street to Onni Group, according to Crain’s. The Canadian firm would then spend about $154 million to renovate the property.

The deal is contingent on the City Council designating the building a landmark, and giving its owners an accompanying property tax break, according to the report, citing budget documents with the city Landmarks Commission.

Two years ago, Kushner agreed to sell the building to an Angelo Gordon-led venture, which has since transferred its purchase agreement to Onni, according to Crain’s, citing sources close to the deal.

Kushner Companies initially purchased the building 13 years ago for $276 million in a sale-leaseback with AT&T, according to Crain’s. The new sale would represent a 32 percent drop from the last sales price. AT&T’s 670,000-square-foot lease expires in 2022.

Kushner refinanced the building with a $184 million mortgage in 2017 from Apollo Global Management; the debt retired a $132 million mortgage, according to Crain’s. The refi agreement led White House ethics investigators to launch a probe in 2018 after an Apollo executive had meetings at the White House with Jared Kushner, President Trump’s adviser and son-in-law, and Charlie Kushner’s son.

In a statement after publication, Kushner president Laurent Morali told The Real Deal the “Chicago transaction has been a huge success for Kushner.” Morali added the company has “received approximately $275 million of triple net rental payments from AT&T over the last 12 years, which was used to reduce outstanding debt. The transaction will generate a substantial profit for Kushner.”

With the purchase, Onni is betting Chicago’s hobbled downtown office will return. Office vacancy in the city hit a nine-year high in the third quarter, according to a recent report from CBRE. Last year, Onni paid $78 million to buy the 17-story Union Tower in the Loop. [Crain’s]Keith Larsen


Related Articles

arrow_forward_ios
Kushner Cos. selling lone Chicago property
Kushner Cos. selling lone Chicago property
Kushner Cos. selling lone Chicago property
White House attorneys investigating if loans to Kushner Companies violated law: report
White House attorneys investigating if loans to Kushner Companies violated law: report
White House attorneys investigating if loans to Kushner Companies violated law: report
747 North Wabash Avenue and 1407 South Michigan Avenue (Photos via The Bernardin; 1407 on Michigan)
Two Downtown rental towers hit market for about $100M each
Two Downtown rental towers hit market for about $100M each
The two-flat building in Woodlawn where Emmett Till lived (Getty)
Surge in efforts to landmark Chicago’s historic Black homes
Surge in efforts to landmark Chicago’s historic Black homes
Developer John Murphy with the River North hotel. (350 North Orleans, Murphy Real Estate Services)
John Murphy plans upscale revamp of Holiday Inn Wolf Point
John Murphy plans upscale revamp of Holiday Inn Wolf Point
Juanita Vanoy and the Chicago Property. (Getty, Google Maps)
Michael Jordan’s ex-wife lists Chicago mansion for $5 million
Michael Jordan’s ex-wife lists Chicago mansion for $5 million
Cenacle Retreat House and Benedictine Sisters Monastery. (Midwest Jesuit, Benedictine Sisters of Chicago)
Two convents look to redevelop, sell sprawling campuses
Two convents look to redevelop, sell sprawling campuses
(Rendering courtesy of Chicago Fire Football Club)
Chicago Fire plans massive training facility in Belmont Cragin
Chicago Fire plans massive training facility in Belmont Cragin
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...