Madison, PGIM list Signature Room
Cushman and Wakefield tapped to sell 26k sf at Mag Mile tower
While retail and office struggle on the Magnificent Mile, the restaurant market is soon to be tested.
Madison Capital and PGIM Real Estate have hired Cushman & Wakefield to sell the upscale Signature Room, totaling 26,000 square feet on the 95th and 96th floors of the tower at 875 North Michigan Avenue, Crain’s reported. There has been no official asking price for the property, which includes the restaurant on the lower floor and a cocktail bar above.
Madison Capital and a PGIM predecessor acquired the Signature Room and retail space at the building for $41.5 million in 2012 from Deutsche Bank, which seized the 100-story tower after the previous owner defaulted on its loan. The restaurant’s operator, Management Group, is fully committed to the site and recently extended its lease through 2031.
Landing a buyer for the Signature Room could be difficult given the high vacancy rates among nearby properties and the overall beleaguered state of the neighborhood. Yet, Cushman & Wakefield is marketing the property as a consistent well-performing venture that provides a steady stream of cash flow no matter the circumstances of its surroundings.
“It’s the intersection of experience and dining,” Cushman’s Michael Marks told the outlet, adding that the restaurant boasts some of the best views of the city and Lake Michigan.
Chicago’s restaurant scene has rebounded well compared to other commercial sectors in the wake of the pandemic. Still, rising labor and food costs have minimized profit margins, but other high-end, downtown restaurant deals signal some investors are maintaining confidence in the sector.
Phoenix-based Fundamental Income paid nearly $30 million for the Tao restaurant at 632 North Dearborn Street last summer, equating to about $860 per square foot.
In addition, local investor Jiazhao “Frank” Chen recently acquired Cité and some retail space for $4.7 million in a bankruptcy auction.