Beacon Capital Partners is offloading a renovated East Loop office tower, which has a mortgage balance of $156 million from Bank of America.
The Boston-based real estate investment firm, led by Fred Seigel, has listed the 30-story office building at 303 East Wacker Drive, Crain’s reported.
An asking price isn’t listed for the 944,000-square-foot tower, but the mortgage balance comes to $165 per square foot, and the listing could test investor appetite for office assets in a down market. It is being marketed by Cushman & Wakefield’s Tom Sitz, Cody Hundertmark and Dan Deuter.
Beacon Capital acquired the building for $182 million in 2018, and spent $32 million on renovations to the lobby and common areas in an effort to attract tenants.
The shift towards remote work, coupled with high-interest rates, has left many downtown office buildings struggling to fill space. While 303 East Wacker Drive has seen some success in attracting tenants like James Hardie and CNO Financial Group, the building is 77 percent leased. It has 51 tenants with a weighted average lease term of nearly 5 years, and occupancy is projected to drop to 66 percent due to imminent move-outs.
One tenant slated to exit is AECOM. The Dallas-based engineering firm recently signed a lease for 23,000 square feet at One Prudential Plaza, where it will relocate later this year.
This is not the only Chicago property where Beacon faces challenges; the firm is also dealing with debt at the AMA Plaza, at 330 North Wabash Avenue, where a $370 million loan has been moved to special servicing.Beacon’s situation mirrors the broader struggles in the downtown Chicago office market, where landlords grapple with lower demand for traditional office space and the financial pressures of maturing debt. Beacon also owns other notable office buildings in Chicago, including 231 South LaSalle Street, 515 North State Street and 1 North Dearborn Street.
— Andrew Terrell
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