search

The Real Deal Logo

Trending

Glossier founder is buyer of $22M Brooklyn townhouseGlossier founder is buyer of $22M Brooklyn townhouseTides’ original investors may be wiped out by preferred equity dealTides’ original investors may be wiped out by preferred equity dealLA court strikes down SB9 law allowing single-family lot splitsLA court strikes down SB9 law allowing single-family lot splitsLandlords to Rent Board: The Bronx will burn againLandlords to Rent Board: The Bronx will burn again
Commercial
Chicago

Howard Hughes Corp. has strong first quarter after dumping Chicago tower

Chicago investor Tim Callahan and New York’s Oak Hill Advisors bought the North Wacker tower from Hughes for $210 million

Howard Hughes CEO David O'Reilly and 110 N Wacker Drive (Howard Hughes, 110 N Wacker Drive)
Howard Hughes CEO David O'Reilly and 110 N Wacker Drive (Howard Hughes, 110 N Wacker Drive)

Howard Hughes Corp., had a profitable first quarter, thanks to the sale of its stake in Chicago’s 110 N Wacker Dr., the second-most-valuable skyscraper in the city.

Chicago real estate investor Tim Callahan and New York’s Oak Hill Advisors paid $210 million to Howard Hughes for a controlling stake in the 55-story tower. That values it at more than $1 billion.

It was among the largest transactions for an office building in Chicago, with Willis Tower as the only Chicago skyscraper with a higher valuation, at $1.3 billion when it was sold to Blackstone in 2015.

Before the sale, which closed in March, the tower was a $1.6 million loss for Howard Hughes in 2021, according to its first-quarter earnings call.

Sign Up for the undefined Newsletter

Howard Hughes CEO David O’Reilly said in a release that the tower was one of the last non-core assets the company had in its portfolio. The sale brought in $169 million — the company’s initial investment in the property was $13 million, according to Bisnow.

The 1.5 million-square-foot tower opened in 2020. It’s more than 82 percent leased to long-term tenants, according to Crain’s. Its anchor tenant is Bank of America, which leases more than 500,000 square feet and it has a 45-foot lobby, dining options and a secondary air-filtration system that was added after the pandemic. CBRE will oversee leasing and management of the property.

The sale comes at a precarious time for Chicago’s office market, a sector still slow to recover from the pandemic and a shift to remote work. It underscores demand for office properties with views and amenities, even as the pandemic turns longtime work practices topsy-turvy. Chicago office buildings that have updated amenities in popular locations like Fulton Market are finding new tenants relatively quickly, while older buildings are struggling.

[Bisnow] — Miranda Davis

Read more

Tags
Howard HughesOak Hill AdvisorsOffice LeasesWacker Drive