Domenic Lanni and Timothy Phair’s firm L3 Capital booked a new act on Fulton Market’s real estate scene by selling a building it turned into entertainment giant Live Nation’s office.
Swiss insurer Zurich’s alternative investment arm paid $18.1 million to buy the building at 1020 West Randolph Street from Chicago-based L3 last month, completing a trio of boutique office purchases across the U.S. this year, records show. The other two that Zurich bought were a 131,000-square-foot building in the Cherry Creek area of Denver that fetched $52 million, and the 50,000-square-foot building at 58 Charles Street in Cambridge outside of Boston.
“If you can pick these really interesting nodes inside these markets that have a dynamism and vibrancy, you can see where there is traffic and people returning to the office. We’re trying to pick the right nodes,” said Sean Bannon, head of U.S. real estate for Zurich, which has its North American headquarters just northwest of Chicago in Schaumburg.
He said Zurich wants to get back into the San Francisco office market, where it lost some bids to buy property earlier this year. It previously owned and operated a portfolio of boutique office buildings in San Francisco during the 2010s that it sold in late 2019, just before the pandemic rocked values. He wants to return to the market with a purchase in 2026, he told The Real Deal.
“We are finding a lot to like about office pricing in premium locations in good markets, particularly the discounts to replacement cost,” Bannon said, adding it bought all three offices without using debt to fund the purchases.
The Chicago deal consists of a 32,000-square-foot building that L3 bought back in 2019 and since remodeled into a modern office building, with Live Nation as its anchor tenant. L3 paid a total of more than $19 million for it, along with the building at 932 West Randolph Street. It bought the properties from Fifth Third Bank, which closed branches in the buildings after it acquired MB Financial. The $19 million purchase also included a parking lot at 1020 West Lake Street.
L3 used a $13.8 million construction loan from CIBC that it took out in 2022 to redevelop the building at 1020 West Randolph, property records show. The total cost of the project isn’t clear, and L3 didn’t return a request for comment.
L3 has been a serial investor in Fulton Market, where it also teamed up with LaSalle Investment Management on the popular Time Out Market food hall on Fulton Market Street. The partners sold it in 2023 for $35 million to the wealthy Italian family of the global spirits brand Campari Group.
Phair and Lanni’s firm also has investments in the Gold Coast, Lincoln Park, Lakeview and State Street in the Loop, among other out-of-state markets such as New York City and Miami.