Chicago School Nears Purchase of West Loop Office Building

A vacant office building is on the verge of changing hands in Chicago’s West Loop.

The Chicago School, a nonprofit university, is finalizing a deal to buy the 233,000-square-foot former Tyson Foods building, at 400 South Jefferson Street, Crain’s reported. The seller is Massachusetts-based Office Properties Income Trust.

The acquisition is part of the school’s strategy to consolidate its Chicago operations, as its local office and classroom spaces are spread across three locations: 325 North Wells Street, the Merchandise Mart and 203 North LaSalle Street.

In addition, the former Tyson Foods building is expected to house the Illinois College of Osteopathic Medicine at the Chicago School, which is undergoing accreditation processes.

While the sale price remains undisclosed, the Chicago School plans to invest “tens of millions” of dollars in acquiring and renovating the six-story building, according to sources familiar with the deal.

The impending acquisition is poised to resonate positively within Chicago’s central business district, where office landlords are grappling with record-high vacancy rates, driven by the remote-work movement and persisting downsizing trends.

While the Chicago School’s relocation will create voids in three buildings, the size of the Jefferson Street building surpasses the combined space that it’s leaving, contributing to a net reduction in downtown’s vacancy rate, the outlet said.

Chicago real estate titan Sterling Bay redeveloped the Tyson Foods building in 2012, adding amenities such as a 500-seat auditorium, rooftop deck and indoor parking.

Sterling Bay sold the property for almost $98 million in 2013 to a company that later merged with other REITs to form Office Properties Income Trust. Office Properties’ Chicago-area portfolio also includes 1000 West Fulton Market, a low-rise office building in Arlington Heights and the 724,000-square-foot Hub 1415 office complex in Naperville.

—Quinn Donoghue