Upstart WindWave Buys Discounted Chicago Office for Conversion

A $64 million plan to convert the top six floors of a River North office building into apartments is moving forward, marking one of Chicago’s largest office-to-residential projects without city backing.

WindWave Real Estate and Path Construction acquired the office portion of the former Salesforce headquarters at 111 West Illinois Street for approximately $17 million, with backing from local equity firm Landrock LP, CoStar reported.

The space, spread across floors five through 10, will be redeveloped into 153 apartments. The space spans about 144,000 square feet. The purchase price is included in the $64 million conversion estimate, which comes to $418,000 per apartment unit.

The deal included the building’s ground-floor retail space, leased to Roka Akor and Tarry Coffee, but excludes floors two through four, which are owned by the Erikson Institute, a college graduate school. The retail square footage was not disclosed.

The seller was Munich-based real estate asset manager Manova Partners, previously known as GLL Real Estate Partners, a firm spun off from Australian investment banking company Macquarie last year. Manova was repped by Cushman & Wakefield brokers Cody Hundertmark, Tom Sitz and Dan Deuter.

Construction is set to begin this month, with move-ins expected by next summer. Planned amenities include coworking space converted from former WeWork offices, plus a rooftop fitness center, lounge and pet spa.

A prior agreement last year between Manova and Chicago Development Partners never closed, though it’s unclear whether CDP assigned the deal or exited entirely.

The conversion comes as office vacancy rates remain stubbornly high downtown, and office properties continue to trade at steep discounts. The building last sold for $75 million in 2015. Its value plunged after anchor tenant Salesforce consolidated space into its namesake tower nearby, leaving 111 West Illinois mostly vacant.

Despite being a relatively young office building — built in 2008 — the shift to residential offered a more viable use, the developers said.

The project won’t include any affordable units due to existing zoning and the absence of public financing, distinguishing it from other Loop-area conversions that have used tax increment financing subsidies in exchange for affordability commitments.

Jon Cordell, a former Lendlease executive who founded WindWave last year, said high demand and limited new supply make River North ripe for luxury apartment absorption.

— Judah Duke