A New York-based developer has a deal to buy the largest remaining development site in Chicago’s Fulton Market district, which in recent years has emerged as the nation's fastest-growing urban office market.
Thor Equities has a contract to buy the 2.7-acre site along Peoria and Wayman streets and train tracks on the northern edge of the former meatpacking district for more than $100 million, according to people familiar with the deal.
Thor Equities is considering building multiple towers on the site, which could include a mix of office and residential space, according to one of the people familiar with the deal. Current zoning for the site allows more than 1.3 million square feet to be built on the vacant land, and Thor could seek additional density from the city.
The firm already is an experienced investor in the area west of the Loop business district, where it developed and owns an office tower just east of the site at 800 W. Fulton. Tenants in that 19-story high-rise include Deere & Co., the maker of John Deere tractors, which last year opened its first Chicago office in the building.
Thor’s deal comes several months into a slowdown in property sales and developments throughout the country because of rising interest rates and other economic concerns.
Thor declined to comment to CoStar News on the deal, which has not been completed and could still fall apart.
No Completed Sale
The site was originally put on the market for sale in 2021 by meat wholesaler Nealey Foods, and by early 2022 Chicago developer Sterling Bay emerged as the likely buyer.
But Sterling Bay, one of the driving forces behind Fulton Market’s rapid growth in recent years, never completed a deal for the site. A spokeswoman for Sterling Bay declined to comment on why the deal was never finalized.
Colliers International broker Mike Senner, who is representing the Nealey family in the land sale, also declined to comment on the deal with Thor.
Fulton Market was the fastest-growing urban office market during a recent five-year period, averaging a 100% increase in the supply of space annually, according to a recent CoStar analysis.
The area is home to the global headquarters of McDonald’s and Mondelez International, and Google’s Midwest headquarters.
The neighborhood has fared well relative to other areas of the Chicago office market amid the challenges of COVID-19 and remote-work trends, with leases including Deere’s new office and Boston Consulting Group’s upcoming move of 1,000 workers from River North to a tower Sterling Bay has under construction at 360 N. Green St.
Residential and hotel developments also have raised the once-low Fulton Market skyline. That includes Related Midwest’s 495-foot residential tower, The Row Fulton Market, that is scheduled to open this summer at 164 N. Peoria St.
Even taller towers are on the drawing board, including a 700-foot office tower that Chicago-based Related Midwest proposes at 725 W. Randolph St. Miami-based Crescent Heights also wants to build a 600-foot-tall apartment tower at 420 N. May St.
Nealey is among many meatpackers and food wholesalers that have cashed in on rising property values in Fulton Market over the past several years. Nealey previously sold two smaller sites in the 900 block of West Fulton in separate deals for more than $32 million combined in 2019, according to Cook County property records.
For the Record
Colliers International brokers Senner and Vern Schultz are representing Nealey Foods in the sale.