Sterling-owned Loop building seeks buyer for redevelopment

An empty 112,000-square-foot building in Chicago’s Loop has landed back on the market, seeking a buyer who will probably tear it down.

The Sterling Organization hired Chicago-based Greenstone Partners to sell the property at 209-227 South State Street, which was home to a Woolworth’s store for years, Crain’s reported. The building has been vacant since a Foot Locker store closed in 2020.

Greenstone is marketing the property as a redevelopment opportunity, given the large lot and zoning that would allow for a tall building to replace the existing one.

“There are so many different ways you can cut it from a development standpoint,” Greenstone CEO Danny Spitz told the outlet. “It’s very rare to find something like this on State Street.”

The building, which Sterling bought for $14.5 million across three transactions in 2018 and 2019, doesn’t have an asking price. County records show Sterling has an $18.3 million mortgage on the building that matures on May 1.

Sterling first tried to unload the building in mid-2020 by hiring CBRE to find investors. With the pandemic in its early stages, investors weren’t willing to take on a new purchase and lenders were hesitant to grant loans, leaving the property unsold.

While a buyer could keep operating it as a retail property, that market’s slow rebound in Chicago, combined with the improving outlook for multifamilies, means the property could also see new life as that kind of building.

“Apartments make a ton of sense, whether it’s adaptive re-use or ground-up,” Spitz told the outlet.

The seven-story building sits on a 20,300-square-foot parcel, which is zoned for a project up to 325,000 square feet. A developer could also request a zoning change that would allow for an even larger project.

Read more

Chicago

Financial firm moving to Sterling Bay’s new Fulton Market development

— Victoria Pruitt