Sterling Bay sells Fulton Market building, home to Google Cloud, for $169M

Real estate developer Sterling Bay sold an office building in Fulton Market, a former Chicago warehouse district where the Class A availability rate stands at 54 percent, for $169 million, marking the city’s second-priciest office sale this year.

Sterling Bay and institutional investors advised by J.P. Morgan Global Alternatives sold the fully leased 206,000-square-foot building at 210 North Carpenter to Germany’s Deka Immobilien, the companies said. Cushman & Wakefield marketed the sale on behalf of Sterling Bay.

Google’s Chicago-based cloud division occupies 132,000-square-feet of the fully leased 12-story building. Tenants include construction company Leopardo Companies, sports marketing firm rEvolution Marketing and CVS Pharmacy. Built in 2019, the Class A building offers flexible floor plans, floor-to-ceiling windows, a rooftop pool and tenant lounge.

“As Chicago continues to navigate its way out of the pandemic, developments like 210 North Carpenter deliver critical financial opportunities that bolster our city’s local economy and increase its visibility with foreign investors,” said Andy Gloor, CEO of Sterling Bay.

The purchase is Deka Immobilien’s first investment outside Europe. It plans to secure “long-term cash flow with the strengths of a Class A green building in one of the most dynamic markets in the USA.” It aims to take part in a U.S. economic recovery that’s forecast to come sooner than in Europe.

The most expensive office sale this year came in June, when American Realty Advisors sold 1K Fulton, home to Google’s Midwest headquarters, to Office Properties Income Trust for $355 million. Sterling Bay bought the cold storage facility for $12 million in 2012 and converted it to a new six-story office building.

Class A space in Fulton Market logged a 54 percent availability rate in the second quarter, according to NAI Hiffman. Still, the firm expects Fulton Market to come back faster than the rest of the city.