Sterling Bay Puts Fulton Market Office Building on Market

Chicago developer Sterling Bay is listing a nearly fully leased boutique building in Fulton Market.

The firm hired JLL to market the 11-story building at 345 North Morgan Street, according to marketing materials cited by CoStar. At a time when many owners of newer office buildings are sitting tight, the offering stands out as one of the few recently completed, high-quality buildings in Chicago to hit the market.

The project is listed unpriced.

The 197,433-square-foot building is about 94 percent leased with a weighted average lease term of nearly 11 years, according to the JLL brochure. Supply-chain management firm Havi is the anchor tenant, leasing roughly 96,400 square feet. Havi is a major vendor to McDonald’s, whose global headquarters sits a few blocks away and helped cement Fulton Market’s status as the city’s hottest office submarket.

Sterling Bay launched the project in 2021 with a construction loan just shy of $70 million from Bank OZK. Cook County property records show the loan has been amended several times, most recently last year, pushing its maturity to August. While the pending maturity might add some urgency, no obvious signs of distress exist, making the deal a cleaner test of investor appetite than many recent office trades.

The sale comes on the heels of Colorado-based Real Capital Solutions’ $132.5 million purchase of the office tower at 401 North Michigan Avenue, the city’s priciest office deal since 2022, according to the publication.

People familiar with the Morgan Street building said its recent completion in 2022, Fulton Market location and relatively modest deal size could draw a broader buyer pool and stronger pricing than Chicago office sales have seen in years. JLL brokers Jaime Fink, Bruce Miller, Sam DiFrancesca and John Mason are handling the offering.

The listing also might provide a clue to Sterling Bay’s shifting strategy. Once the dominant force for Fulton Market’s transformation from meatpacking district to corporate hub — including McDonald’s headquarters and Google’s Midwest outpost — the developer has been shedding properties after its Lincoln Yards megaproject stalled. Last year, it sold a neighboring multifamily site at 350 North Morgan Street for $18 million, and it is no longer involved in Lincoln Yards after separate developers took over the site’s north and south parcels.— Eric Weilbacher