Prime Finance Snags Chicago Building From Spear Street

Prime Finance is inching closer to buying Cushman & Wakefield’s global headquarters in Chicago for around $120 million.

San Francisco-based Prime is more notable for its lending than its investing, according to CoStar. That hasn’t stopped them from entering a preliminary agreement to buy 255 West Wacker Drive, a 31-story tower with 650,812 square feet, for $120 million from Spear Street.

San Francisco-based Spear Street bought the building in 2020 for $210 million, just after the pandemic smashed office space value into smithereens. Spear Street took out a $158.1 million loan from RBC Real Estate Corporation, according to the outlet, and whittled it down to a $143.1 million loan in 2023. The sale would leave a little over $23 million left on the ledger for Spear Street.

Cushman & Wakefield, who operate out of the tower, were hired to find a buyer in February, according to the outlet. Tom Sitz, Cody Hundertmark, Jeremiah Olsen and Kelsey Berry represented Spear Street in the sale. The average tenant size in the building is a smidge over 18,000 square feet, and the building’s lobby, common areas and building systems were upgraded during Spear Street’s tenure, according to the publication. The building is 86 percent leased.

The leasing percentage places the building at odds with other similar sales in recent months. The pandemic shift to remote work hit Chicago office space hard, along with the rest of the nation. In April, 205 West Wacker Drive was surrendered to A10 Capital, and at the time it was only 43 percent leased.

Companies are trying to get out of their leases early at multiple locations. Earlier this year, Downtown Chicago offices had a vacancy rate of 28 percent, landing near record highs. Mixed-use, multifamily conversions are still dominating the foreseeable future of Downtown Chicago office space.

— Hunter Cooke