Two Loop Office Towers Hit Market

Another week, another two Loop buildings up for grabs and billed as prominent apartment conversion opportunities, Crain’s reported.

Transwestern has listed the 14-story office portion of 332 South Michigan Avenue, known as the McCormick Building, in a court-appointed receivership sale.

The property’s New York-based owner, Aetna Realty, was hit with a foreclosure lawsuit last year over a $32.5 million defaulted loan, and the building was most recently appraised at just $6.8 million, down from more than $56 million in 2016.

The top six floors of the building were previously converted into 78 condos, but Transwestern’s Paul Barile said the remaining 348,000 square feet of vacant office space could yet accommodate more than 250 apartments. The property is just 40 percent leased, with flexible office provider Regus its largest tenant. A conversion could also include parking, with three lower levels potentially supporting 150 stalls.

About a block away, Cushman & Wakefield flagged an online auction for 401 South State Street, an eight-story landmark stretching an entire city block.

The vacant, 129-year-old building–which counts stints as the flagship for the Sears retail chain and home to Robert Morris University–will open bidding in August with a starting price of $1.25 million. The building received a $9.2 million appraisal just last year.

The 129-year-old former Sears flagship was seized by special servicer CWCapital in 2023 after its prior owner defaulted on a $47.8 million CMBS loan. The building is being pitched as either a user purchase or a redevelopment candidate, with potential to anchor a broader public push to create a civic-education corridor along southern State Street.

Both buildings sit at the center of the city’s policy and market push to convert obsolete office space into much-needed downtown housing. The city has already pledged $317 million in tax increment funding to support more than 1,800 apartment units along LaSalle Street.

— Judah Duke