Prime Group, CRG Secure Office Tenant for Jewelers Building

A century-old office tower on Wacker Drive scored a win for owners betting on a shaky downtown market.

Sheridan Capital Partners signed a 25,400-square-foot lease in the Jewelers Building at 35 East Wacker Drive, relocating its headquarters from the Wrigley Building, Crain’s reported.

The deal is a boost for Prime Group and Chicago-based Clayco’s development arm CRG, which paid $36 million, or $65 per square foot, for the 556,000-square-foot landmark last year. The joint venture bought the building out of distress — lender John Hancock had filed a $65 million foreclosure suit against the prior owner, Toronto-based Dorchester — wagering that upgrades and targeted tenant improvements could breathe life into the Loop asset. It was the first time the property has changed ownership since 1981.

It was about one-third vacant, a little worse than the broader downtown average, when they acquired it. With Sheridan’s move, plus a lease extension by design firm SmithGroup and an expansion by CRG and parent company Clayco, the building is about 70 percent leased. Michael Reschke Jr., executive vice president for Prime Group, said the results show the strategy of modernizing the nearly 100-year-old tower is “yielding great results.”

JLL’s Pat Schenk and Bill Rogers represented Sheridan in the lease negotiations, while Madison Rose’s Adam Pines and Andrew Marty handled the deal for ownership.

The lease signals the landlords intend to keep the building primarily an office play. Sources previously told the outlet the buyers considered a partial conversion to apartments or hotel rooms, an increasingly common route for vintage office properties squeezed by remote work. A spokesman declined to say whether that remains on the table.

Sheridan is leaving one Chicago landmark — billionaire Joe Mansueto’s Wrigley Building — for another. Jonathan Lewis, a partner at Sheridan, said 35 East Wacker offered the right blend of “historic character and modern amenities” for clients and staff. The Jewelers Building, completed in 1926 and landmarked in 1994, is best known for its 40th-floor cupola, once rumored to house a Capone-era speakeasy and later reimagined by architect Helmut Jahn.

— Eric Weilbacher