Amancio Ortega Eyes Record-Setting Chicago Office Deal

Amancio Ortega, the fast-fashion mogul and founder of global chain Zara, is reportedly working on a blockbuster deal to buy 1 North Wacker Drive in what could be the priciest post-pandemic Chicago sale in the office sector.

CoStar first reported that Ortega is progressing towards a deal to buy the 51-story tower from billionaire Donald Bren’s Irvine Company. Earlier this year, Eastdil Secured brokers confirmed they were hired by Bren to explore options for the tower.

Newport Beach, California-based Irvine notably has invested north of $2 billion in upscale Chicago offices while not letting go of a single property. Any deal for 1 North Wacker would involve assuming the commercial mortgage-backed securities loan for $353 million.

Exact pricing isn’t yet clear, but the outlet reported it could be above $500 million. A sale could breach a four-year-old high water mark for a Chicago office space deal, set by the March 2022 sale of a stake in the Bank of America Tower at 110 North Wacker Drive that valued the property at over $1 billion, though that deal wasn’t for the entire equity stake in the building and the total changing hands came in well under the $500 million mark Ortega is reportedly eyeing.

1 North Wacker was completed in 2001, and spans 1.4 million square feet. Today, the building stands as the prime example of how trophy office space is weatherproof, as the building is 92 percent leased. Comparatively, downtown office buildings average 27 percent vacancy.

Between 2010 and 2015, Irvine made three major swings that totaled $2 billion: 1 North Wacker, a 48-story building at 71 South Wacker Drive and a 60-story building at 300 North LaSalle Street. When Irvine lost Kirkland & Ellis and Boston Consulting Group as tenants in 300 North LaSalle, it made renovations and added new riverfront outdoor space, and also brought in new tenants.

Ortega, on the other hand, has one of the biggest real estate empires in the world through his investment arm, Ponte Gadea. In Chicago, Ortega owns the former Esquire Theater building, a North Michigan Avenue property that has jeweler Tiffany & Co. as a tenant, and the Eurostars Magnificent Mile hotel in River North.

— Hunter Cooke