Domus partnership seeks big return on Fulton Market investment

Domus Group and Barnett Capital are looking for a big return on a Fulton Market commercial building they bought two years ago for $20 million.

The duo, which had planned to redevelop the 100,000-square-foot building at 1133-1155 W. Fulton Market for WeWork, now wants to sell it for about $70 million, sources told Crain’s. Brokerage Stan Johnson Company has the assignment.

The listing comes as activity has been heating up in Fulton Market, despite the larger Chicago office market still trying to fill the empty offices and millions of square feet of sublease space created by the pandemic. This month, Fulton St. Companies said it wants to build 1.1 million square feet of residential and office buildings in Fulton Market, around the 1200 block of West Fulton Street.

Domus and Barnett acquired the 97,000-square-foot building on the western edge of Fulton Market in March 2019 and sought city approval to redevelop the site into a mixed-use project featuring a six-story office building. The three-parcel purchase included a three-story apartment building at 213 North Racine Avenue. The total purchase price for all three was $23.8 million.

The pandemic upended those plans. Months after the acquisition, the new owners signed a lease with WeWork for the whole space and secured $43.5 million in financing from Fifth Third Bank for the co-working firm’s planned renovation, according to Crain’s.

But as WeWork’s fortunes fell, the co-working firm bought out its lease and exited. Last month, consumer products company Kimberly-Clarke inked a lease totaling just under 90,000 square feet, the report noted.

The Fifth Third loan was modified down to $28 million because of WeWork’s departure. The ground-floor retail space, roughly 9,000 square feet, remains available.

[Crain’s] — Alexi Friedman