Sterling Bay Puts River North Garage on Market

A year after succumbing to a massive loss on the sale of a marquee Chicago River office building, Sterling Bay is looking to offload a parking garage across the street as a potential apartment development site.

The Chicago-based developer hired JLL to market the five-story parking structure at 530 West Chicago Avenue, pitching the site as an apartment development opportunity amid intensifying interest along the river, according to a marketing brochure. JLL broker Dan Reynolds is representing the seller, CoStar reported.

The garage sits just north of the Loop and spans about 30,725 square feet. JLL is advertising the site as suitable for a mid-rise or high-rise apartment project with as many as 400 units, depending on how much density a buyer can unlock through zoning and negotiations with neighboring owners.

Sterling Bay bought the garage in August 2018 for $15.5 million, Cook County records show. The decision to sell comes almost exactly a year after the firm unloaded the hulking office building at 600 West Chicago Avenue for about $88.7 million — a steep discount from the roughly $510 million it paid in early 2018 for the 1.6 million-square-foot former Montgomery Ward warehouse, according to CoStar and public records.

The garage sale price will likely hinge on development rights. Under an existing reciprocal easement agreement with the adjacent garage at 811 North Larrabee Street — now owned by Arizona-based 3Edgewood after its purchase of the 600 West Chicago building — a buyer could build a 67-unit apartment building as-of-right. JLL’s marketing materials note that changes to that agreement could allow a 175-unit tower under current zoning, while further negotiations could clear the way for a building with up to 400 apartments.

Any project at 530 West Chicago Avenue would land in a rapidly transforming pocket of River North. Bally’s casino is rising just across the river, while Onni Group is planning thousands of apartments nearby on and around a former Greyhound bus facility at the south end of Goose Island.

The listing also highlights the continued reshaping of Sterling Bay’s portfolio after losing control of the Lincoln Yards megadevelopment and putting other properties in Fulton Market and near Lincoln Yards on the block.

— Eric Weilbacher