A French financial service company is betting that Google’s impending arrival to Chicago’s Central Loop will spark life into the distressed office property it recently foreclosed on.
After seizing control of a 49-story office tower at 161 North Clark Street in March, Societe Generale, led by CEO Slawomir Krupa, has signaled it may hold onto the property long-term rather than sell at a steep discount, Crain’s reported.
The 1.1 million-square-foot tower, which last sold for $331 million (about $300 per square foot) in 2013, became distressed after its previous owner — a consortium of investors led by South Korea’s postal system — defaulted on a $230 million loan from Societe. The lender foreclosed on the property in March following a $236 million lawsuit filed last fall.
The lender was in talks earlier this year with Chicago-based real estate firms Farpoint Development and Golub for a potential sale, but its latest statement hints at confidence in the property’s future.
“161 North Clark is open for business and ready to welcome Google into the neighborhood,” the bank said, emphasizing leasing activity and ongoing improvements to the building.
The office tower is already showing signs of a turnaround, boasting an 86 percent occupancy rate, notably higher than the average for downtown Chicago office spaces.
This success is partly attributed to new and renewed leases with law firm tenants and Cook County’s 106,000-square-foot short-term lease in 2022 to house about 600 employees during office renovations nearby.
In an effort to boost the building’s appeal, Societe Generale has overseen updates to the lobby and signed retail tenant Veteran Roasters coffee shop. With Google’s arrival set to transform the area, the bank is betting the influx of activity will elevate the value of the property, providing long-term financial gains.
Still, the bank hasn’t entirely ruled out the possibility of a sale. Real estate services firm Eastdil Secured continues to market the building, while Farpoint and other potential buyers remain in discussions.
— Andrew Terrell
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