Local Investor Buys Chicago Office Building for $82 per sf

Allstate Corporation has parted ways with a Loop office building at a substantial loss.

The 10-story office building at 29 North Wacker Drive was sold to Chicago-based investor Sanjay Gandhi for a little over $11 million, or $82 per square foot, a 63 percent decrease from the $29.7 million the insurance giant paid for the property in January 2022, CoStar reported.

Colliers International’s Alissa Adler and John Homsher represented Allstate in the sale.

Constructed in 1961, the 133,600-square-foot building stands in the shadow of skyscrapers that dominate much of Wacker Drive, such as the nearby 110-story Willis Tower.

While the sale comes at a loss for Allstate, it’s still too early to know how much of a deal Gandhi got with the acquisition. At the time of the sale, the building was only 57 percent leased. The office vacancy rate in downtown Chicago was just over 25 percent in the second quarter, an increase from 23.8 percent in the previous quarter, according to CBRE.

Gandhi isn’t new to Chicago’s real estate scene. In 2017, he acquired a 84,000-square-foot office building at 228 South Wabash Avenue for $5.9 million, or $70 per square foot. That building is about 66 percent leased, according to a CoStar listing.

The deal underscores the difficulties sellers have in attracting buyers willing to invest in office spaces that need renovations. The sale aligns with the broader pattern of property owners offloading their buildings at discounted prices, both in Chicago and nationwide.

A notable example includes the 36-story tower at 333 West Wacker Drive, which recently sold for $125 million — less than half of its last sale price of $320.5 million in 2015.

Gandhi has not revealed what his plans are for 29 North Wacker. But the low price presents the opportunity to expand the building vertically or add amenities, which can help landlords attract tenants as companies seek to entice workers back to the office.

— Andrew Terrell