Kohan Retail to buy Citadel’s Former Loop Headquarters

A Long Island investor known for scooping up troubled malls is again investing in Downtown Chicago offices.

Great Neck-based Kohan Retail Investment Group agreed to buy the 37-story former Citadel headquarters tower at 131 South Dearborn Street, according to people familiar with the deal. CoStar reported that the roughly 1.6 million-square-foot tower, long known as Citadel Center, would mark Kohan’s third Chicago office acquisition in less than a year.

The sale price could not be determined, but it’s expected to be a sharp discount to the $448 million in debt taken out by owners, TPG Angelo Gordon and Hines, in a 2020 refinancing led by Germany’s BayernLB. The deal has not closed and could still fall apart, according to the outlet. Eastdil Secured brokers Bryan Rosenberg, David Caprile, Alex Caron and Sam Byczek are marketing the property.

If completed, the acquisition would give Kohan control of more than 3.7 million square feet of mostly high-vacancy office space across Chicago. The firm entered the market in June with a $45 million purchase of the 65-story tower at 311 South Wacker Drive, where it has floated plans for new leases and a potential hotel conversion. It followed that with a discounted $60 million mortgage purchase on the 28-story building at 33 West Monroe Street, later taking title through a deed in lieu of foreclosure, Crain’s first reported.

At the 131 South Dearborn tower, Kohan would inherit a high-profile property still reeling from billionaire Ken Griffin’s decision to move Citadel’s headquarters to Miami, according to the publication. Citadel has since downsized locally to the building at 353 North Clark Street, leaving a sizable hole in the Loop tower.

The building at 131 South Dearborn is about 45 percent vacant, according to Eastdil marketing materials, and was just over 55 percent leased when it hit the market in September, with a weighted average lease term of 6.4 years. Consulting firm Bain & Company now occupies the top five floors, while JPMorgan Chase expanded last year to 321,000 square feet.

Eastdil pitched the property as a chance to offer naming rights and a private entrance to a tenant seeking roughly 300,000 contiguous square feet.

— Eric Weilbacher