Here are Chicago’s 10 biggest investment sales of 2020

Office deals led the pack, including sale of McDonald’s HQ in Fulton Market and Michael Shvo’s purchase of “Big Red” tower in Downtown

Chicago /
Dec.December 23, 2020 05:18 PM
110 North Carpenter Street and 333 South Wabash Avenue (Sterling Bay, Shvo)

110 North Carpenter Street and 333 South Wabash Avenue (Sterling Bay, Shvo)

 

As with most other cities, Chicago’s commercial real estate market went off the rails in 2020, upending what had been a promising start to the year. Demand for office space tanked, hotels emptied out leaving owners struggling to pay their loans and Covid restrictions strangled retailers whose customers dared to venture into brick-and-mortar stores.

Investment sales activity, however, did not dry up. And six of the 10 biggest commercial investment sales in Chicago this year involved office buildings.

The priciest on the list was in trendy Fulton Market, where Sterling Bay and JPMorgan sold a 575,000-square-foot building that is the McDonald’s headquarters for over $400 million.

Two multifamily buildings made the list, including the 479-unit luxury Essex on the Park in Grant Park.

One retail property in Lakeview — leased by Whole Foods — also made the top 10. And so did a 950,000-square-foot industrial park near O’Hare International Airport, highlighting Chicago’s consistently bright industrial sector amid an otherwise bleak year.

The Real Deal compiled the 2020 list of biggest commercial investment sales through an analysis of Cook County property records from January to early December.

1. 110 North Carpenter Street, Fulton Market | Normandy Properties | $412M

In the largest sale of the year, a joint venture of Sterling Bay and JP Morgan sold their 575,000-square-foot office building in Fulton Market for $412 million to Pittsburgh-based Normandy Properties in October.

McDonald’s headquarters, the nine-story building was developed in 2018. Sterling Bay and JP Morgan bought the property in 2014 for $167 million on a site that had been home to Oprah Winfrey’s Harpo Studios.

McDonald’s has a long-term lease at the building and occupies about 85 percent of the space.

2. 333 South Wabash Avenue, Downtown | Shvo, Deutsche Finance | $376M

Michael Shvo made a big splash with the purchase of the 45-story “Big Red” office tower for $376 million at the beginning of the year.

The acquisition was made with the backing of investment partner Deutsche Finance. John Buck Company and Morgan Stanley were the sellers. The price the New York developer paid compared to the $108 million that John Buck and Morgan dropped in 2016, when they bought the 1.2 million-square-foot tower from CNA Financial.

The tower was 92 percent leased at the time of Shvo sale, with tenants that include Northern Trust and the Chicago Housing Authority.

3. 225 West Wacker Drive, Downtown | Spear Street Capital | $210M

San Francisco-based Spear Street Capital acquired the 31-story office tower on the south bank of the Chicago River in March.

South Korea-based Mirae Asset Global Investments had paid $218 million for the 651,000-square-foot building in 2013.

Mirae refinanced the property in 2018 with a $133 million loan. The building was 96 percent leased at the time of the sale, with Cushman & Wakefield housing its global HQ. A number of leases were set to expire this year.

4. 808 South Michigan Avenue, Grant Park | Iconiq Capital | $190M

Iconiq Capital paid $190 million for a new luxury apartment tower in Grant Park, marking the largest multifamily sale of the year.

Divesh Makan’s San Francisco-based investment firm bought Essex on the Park, a 479-unit development, from Chicago-based Oxford Capital and Quadrum Global. The short-term rental company Sonder purchased 92 units in the building soon after it was completed last year.

5. 400 North McClurg Court, Streeterville | Strategic Properties | $154.5M

Condo deconversion pro Strategic Properties of North America acquired this large apartment tower from a unit of Deutsche Bank.

The New Jersey-based investor paid $154.5 million for the property, called Cityfront Place.

DWS, the unit of Deutsche Bank, acquired the 48- unit building for $107 million in 2011. Rents range between $1,715 a month for a studio and $3,216 for a two-bedroom apartment.

6. 1511 West Webster Avenue, Lincoln Park | Apex Capital Investments | $111M

In October, Sterling Bay sold the office complex, which is located on the north end of its massive Lincoln Yards development, marking one positive sign for the Chicago market. The buyer of the 207,000-square-foot property was Apex Capital, on behalf of a Middle Eastern capital partner.

The four-story building sits along the Chicago River and is home to logistics firm C.H. Robinson, which recently signed a 15-year lease. Sterling Bay paid $21.3 million for the 4-acre site in 2015. It developed the property with an $82.5 million construction loan the next year.

7. 905 West Fulton Street, Fulton Market | Deka Immobilien | $86.7M

In May, Thor Equities sold this 98,000-square-foot office building that it had developed. The price marked the highest sale in the neighborhood to date.

The buyer was German real estate firm Deka Immobilien.

The five-story building is the future global headquarters of snack maker Mondelez International, which will take 77,100 square feet of space. That long-term lease deal was announced in January 2019, and includes more than 6,000 square feet of retail space.

8. Multiple addresses — Brennan Investment Group, Investcorp | $74.2M

In the biggest industrial deal of the year, which closed in November, Brennan and Investcorp bought an eight-building industrial park near O’Hare International Airport.

The deal for the 955,000 square feet of space shows the strength of Chicago’s industrial market, which weathered the pandemic better than other sectors, with demand for big warehouses rising along with e-commerce orders. The seller was Denver-based EverWest Real Estate Investors.

A venture of Distribution Realty Group and Pearlmark Real Estate bought the properties for $59.8 million in 2015. EverWest assumed investment management of the portfolio in 2017, according to Crain’s. .

9. 3201 North Ashland Avenue, Lakeview | Eaton Vance RE | $70.9M

Eaton Vance purchased this 72,500-square-foot retail property that is leased to Whole Foods in May. The Boston-based investment firm bought the property from Novak Construction, which had first put the property on the market in 2016.

Amazon-owned Whole Foods moved into the Lakeview building in 2017, and signed a 20-year lease. That includes a 10 percent rent increase every five years, according to Crain’s.

10. 801 South Canal Street, South Loop | 601 W Companies | $68M

601W, which redeveloped the massive Old Post Office, bought this five-story office building for $68 million in February. The seller was Canal/Taylor Venture, according to the brokerage firm JLL, which advised on the deal.

This month, New York-based 601W said it would overhaul the 591,000-square-foot building to the tune of $180 million, according to Crain’s. The now-vacant six-story building had until August been fully occupied by financial services company Northern Trust. It vacated the space at the end of its lease to consolidate operations into a new location at 333 South Wabash Avenue.


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