Hines Strikes Deal for Former Boeing Chicago Headquarters

Hines is angling for one of the most recognizable office towers on the Chicago River, opening negotiations to buy Boeing’s former headquarters after another suitor walked away.

The Houston-based developer is in early talks to acquire the 36-story building at 100 North Riverside Plaza, Costar reported.

Sterling Bay had the tower under contract over the summer, reportedly for $25 million to $30 million. That would’ve been $32 to $39 per square foot for the 777,400-square-foot building, a price that reflected the distressed state of downtown offices.

That deal collapsed, however. A Sterling Bay spokesperson said in a statement to The Real Deal that the firm’s due diligence “did not support advancing a transaction in the current market conditions.”

Boeing, which decamped for Northern Virginia in 2022, is selling only the building’s leasehold interest. The land underneath is owned separately by the New York-based Stahl Organization under a 99-year ground lease that runs until 2084. Stahl refinanced its ground position with a $40 million loan in 2021, layering on another complication for any buyer hoping to make the numbers work.

People familiar with the negotiations told the outlet that Hines could try to partner with Stahl or strike a buyout to reunify the building and land, an approach that would make financing easier. Without that, the developer would need to generate enough rental income to cover escalating ground-lease payments on top of building operations and any upgrades.

Here Technologies anchors the building with nearly 118,000 square feet, and Boeing still uses space in the building.

In a sign that Boeing is preparing for a sale, the company recently executed a memorandum of lease for three mid-rise floors spanning about 70,000 square feet, securing expansion rights, signage controls and restrictions on leasing to certain competitors or foreign government entities. Its lease runs from 2026 through 2032 with extension options.

Hines has spent decades shaping the riverfront, most recently with the 60-story Salesforce Tower just down the river. Although 100 North Riverside is more than 30 years old, brokers are betting a deep-pocketed owner willing to renovate could still capture tenants hunting for high-end space in a market short on true Class A properties.

— Eric Weilbacher