Chicago Development Partners is poised to acquire a heavily discounted and largely vacant office property in the city’s River North district with plans for residential conversion.
The developer, led by industry veteran Howard Weiner, has agreed to purchase the office portion of 111 West Illinois Street for about $17 million, CoStar reported, citing an anonymous source. If the sale goes through at that price, it would mark a 77 percent discount from the $75 million it commanded in 2015. The square-footage wasn’t reported.
The 10-story building is being sold by Macquarie, an Australian investment firm which took over the office property as part of its acquisition of GLL Real Estate Partners in 2018.
The developer plans to convert it to 145 apartments. Apartments are in high demand in downtown Chicago neighborhoods, and rent growth is on the upswing. Because of that, the multifamily investment market is also showing promise.
Sections of the building owned by the Erikson Institute are not part of the deal. The sale is being managed by Cushman & Wakefield’s Cody Hundertmark, Tom Sitz and Dan Deuter.
The property has been on the market since May, and it was 23 percent leased at the time of listing. The low occupancy was partly due to Salesforce’s departure, which left a big hole when it consolidated its operations into Salesforce Tower at 333 West Wolf Point Plaza.
The acquisition, which is still pending, aligns with broader trends in the U.S. real estate market, where high-vacancy office properties are being sold at substantial discounts and converted into residential units.
Other adaptive-reuse projects in the region include plans to convert portions of LaSalle Street office buildings into affordable housing and a project on the Magnificent Mile aiming to turn upper floors of a 24-story office building at 500 North Michigan Avenue into 320 apartments.
— Andrew Terrell
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