Manulife Financial is the latest to bite the bullet on sliding Loop office values amid the pandemic.
A venture of the Canadian financial services company listed the 40-story, 815,000-square-foot office building at 55 West Monroe Street, Crain’s reported. The property doesn’t have a listing price, though the outlet cited people familiar with the offering who believe bids will come in at less than $130 million, well under the $244 million Manulife subsidiary John Hancock paid for the building in 2014.
The listing is the second 40-story building Manulife has moved to sell in the last two months. In October, a different venture of the company hired JLL to find a buyer for the office building at 200 South Wacker Drive.
The Monroe Street building was 92 percent leased when Manulife took control of it eight years ago, compared to only 67 percent leased today.
The potential loss Manulife is set to take on the building echoes the downward turn Chicago’s office buildings have taken since the coronavirus forced businesses to adopt remote or hybrid work policies, moves many have since followed with shedding their downtown real estate.
With record-high vacancy in office properties as a result of the drop in demand, Manulife is willing to take a steep loss on the buildings instead of waiting for the market to bounce back.
Some downtown office landlords with no equity left in their properties have chosen to hand their buildings over to their lenders instead of facing foreclosure. John Hancock and Manulife don’t have that move in their cards since they have no debt on the Monroe property. That also means they’re not being forced to sell by an upcoming loan maturity like other firms testing the downtown office market face on their properties. Rather, the Monroe building’s owner is seeking to move on for other reasons.
The 41-year-old office tower has 56 tenants, including the Financial Industry Regulatory Authority, which occupies the largest amount of space with a 61,222-square-foot lease.
— Victoria Pruitt