A Chicago investor has acquired a five-story retail and office building on a prominent corner of State Street, betting that a discounted price will provide enough cushion to fill former WeWork coworking space and overcome broader struggles in one of the city’s best-known shopping corridors.

North American Real Estate recently bought the building at 100-112 S. State St., NARE Principal Savas Er told CoStar News.

Er declined to disclose the sale price, which also could not yet be found in Cook County property records online, though he said it was well below the $35 million the property traded for in 2015.

Discounted sales have been a common theme in Chicago and throughout the country amid poor office demand, rising interest rates and other economic factors. That was most recently highlighted when local investor Igor Gabal bought the leasehold interest in a half-vacant, 12-story office building in Chicago’s Loop business district for just $4 million.

As for 100-112 S. State, Er said his firm paid “a good discount from pre-pandemic levels based on State Street’s current position” of high retail vacancy.

NARE has owned a vacant, six-story retail and office building next door at 114 S. State since 2019.

“We thought acquiring the next building, expanding our footprint and controlling the corner would give us a better positioning for our investments,” Er said.

Although it’s a traditionally strong shopping avenue, immortalized by Frank Sinatra as “that great street,” State Street has struggled in recent years from retailers such as Old Navy, Urban Outfitters, Forever 21, Office Depot and DSW moving out. Newcomers in recent years include JD Sports and Primark.

A venture of New York-based developer Tishman Realty and an affiliate of Paris-based financial services firm AXA Group bought the property for $35 million in 2015 when the area was on better footing.

The venture bought it from Amalgamated Bank, which had used the building as its longtime headquarters.

Tishman and AXA made extensive investments to convert the building into retail space on the lower two floors and offices on the top three floors.

The lower level of the 68,847-square-foot building along State and Monroe streets is fully leased to Champs Sports and Capital One Café, both of which had more than nine years left on their leases when Cushman & Wakefield began marketing the property for sale early last year.

Upper floors had been leased to WeWork, but the flexible workspace provider moved out long before filing for bankruptcy reorganization last year. Another coworking company, Expansive, took over one of WeWork’s former three floors.

NARE will seek office tenants to fill the other two floors of office space previously built out for WeWork, Er said.

Tishman did not respond to requests for comment from CoStar News. AXA declined to comment.

Er’s firm is a longtime investor in retail properties throughout the Chicago area. Other acquisitions in recent years have included the landmark Flat Iron Arts Building in Wicker Park on the city’s North Side for almost $20 million and a shopping center in north suburban Northbrook, Illinois, for more than $18 million.

The sellers were represented by Cushman & Wakefield brokers Michael Marks, Evan Halkias and David Matheis.