Another vacancy-plagued office building in downtown Chicago is up for grabs and likely to sell for cents on the dollar.
Metropolitan Life Insurance has hired JLL brokers to sell the 16-story, 372,600-square-foot building at 550 West Washington Boulevard, more than a decade after buying it for nearly $111 million, CoStar reported.
The building’s vacancy rate stands at 69 percent, far worse than the city average of just over 25 percent, which marked a record high in Chicago last quarter. The property was 92 percent leased when MetLife bought it in 2013.
While an asking price has not been disclosed, it’s likely to sell for a fraction of the $111 million that MetLife paid, prolonging a troubling trend in Chicago. Remote work, coupled with spiked interest rates, continue to crush office property values across the city, leaving many landlords no choice but to sell their assets at steep discounts or hand the keys back to their lenders to evade foreclosure.
The 655,000-square-foot building at 150 North Michigan Avenue, for instance, sold for $60 million in January, down from its last trade of $121 million in 2017. Several weeks prior, the 240,000-square-foot building at 300 West Adams Street sold at a nearly 90 percent discount from its last appraisal of $38 million in 2012.
JLL is playing up the West Washington building as an opportunity to buy at a “substantial discount,” leaving plenty of overhead for upgrades or a complete overhaul of the site. The offering also includes exterior signage and naming rights for prospective large tenants.
Architecture firm Gensler has completed a feasibility study that deemed the 24-year-old tower suitable for conversion into roughly 388 apartment units, contingent upon a zoning change. Office-to-residential conversions have become increasingly common in recent years amid a decaying office sector and a relatively strong multifamily market.
—Quinn Donoghue
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