Sterling Bay Nears Deal to Buy Boeing’s Chicago Headquarters

Sterling Bay is closing in on a deal to acquire Boeing’s former Chicago headquarters in the West Loop, a strikingly discounted bet on downtown office real estate, as the firm navigates fallout from the implosion of its Lincoln Yards megaproject.

The 36-story building at 100 North Riverside Plaza, which Boeing has owned since 2005, is reportedly under contract for between $25 million and $30 million, a fraction of the $165 million the aerospace giant paid for the tower nearly two decades ago, Crain’s reported. The reported price would be $32 to $39 per square foot.

Cushman & Wakefield is marketing the 776,000-square-foot building on Boeing’s behalf.

If finalized, the deal would mark a return to the office investment game for Sterling Bay, which has spent the past several years selling off assets and losing ground on its troubled Lincoln Yards megaproject. The firm recently offloaded the Groupon headquarters at 600 West Chicago for just $89 million, a stunning drop from the $510 million it paid in 2018.

Sterling Bay’s rumored Boeing bid fits a familiar playbook of buying distressed downtown office assets at deep discounts with plans to invest in renovations and lease up space. The building is about 52 percent occupied, with mapping firm Here Technologies its largest tenant. Boeing still occupies about 70,000 square feet and is reportedly considering a leaseback as part of the transaction.

Sterling Bay has been reeling from the collapse of its Lincoln Yards development, the $6 billion riverfront megaproject once pitched as Chicago’s next marquee district.

The firm lost control of more than half the site earlier this year when lender Bank OZK seized the land following a loan default. Sterling Bay’s efforts to line up rescue capital or infrastructure bond financing failed amid rising interest rates and political gridlock under former Mayor Lori Lightfoot, who clashed publicly with Sterling Bay CEO Andy Gloor.

A potential sale would be the latest example of just how far office values have fallen in Chicago; by the outlet’s count, 19 prominent downtown office buildings sold over the past 22 months have collectively shed more than $2 billion in value compared to their last sale prices before the pandemic. The Boeing building’s potential price would add another data point to that downward spiral.

Boeing, which relocated its headquarters to Arlington, Virginia, in 2022, still pays ground rent to an affiliate of New York’s Stahl Organization, which owns the land beneath the tower. A $40 million mortgage on that parcel matures in 2031.

— Judah Duke