A vacant retail property on Chicago’s State Street sold at a steep discount, a sign of the corridor’s continued struggle with high vacancy and declining values.
California‑based lender Calmwater Capital sold the eight‑story, 112,495‑square‑foot building at 213‑227 South State Street for $2.8 million, Crain’s Chicago Business reported, based on information from brokerage SVN Chicago Commercial, which represented the seller. The property has sat empty since Foot Locker closed in 2020.
The sale follows other bargain transactions along State Street, including an $8.3 million deal at State and Madison streets in October.
The sale represents a major financial loss for Calmwater, which took control of the building in 2023 through a deed in lieu of foreclosure. The Sterling Organization, the previous owner which has other Chicagoland retail woes, surrendered the property rather than pay off an $18.3 million mortgage. Calmwater did not comment on the deal.
The buyer, Downtown Islamic Center, took the opportunity to acquire a property to accommodate its growing congregation. The mosque already owns a building at 231 South State Street and had long sought additional space. Chairman Mohammed Kaiseruddin said the new facility will expand services for downtown congregants, including Sunday school for children, adult religious education and interfaith activities.
Broker Ross Modjeska of McCaffery Interests, who represented the mosque, noted that given current market conditions, such deals are rare, and the organization was fortunate to act quickly.
SVN Chicago Commercial brokers Chad Schroedl and Scott Maesel represented Calmwater in the deal.
The transaction highlights the challenges facing Chicago’s Loop retail market. Nearly five years after the onset of the pandemic, downtown foot traffic remains depressed, remote work has reduced downtown activity and vacancy rates hover at about 26 percent, according to Stone Real Estate. These conditions have driven down property values, creating opportunities for buyers with local market knowledge. However, in the Chicagoland suburbs retail has found a solid footing in tandem with residential development.
— Joel Russell