About 2 ½ years after buying a 10-story office building in Chicago’s Loop business district and floating it as a potential future headquarters, Allstate has instead unloaded it for a little more than one-third of its purchase price.
The insurance giant sold the building at 29 N. Wacker Drive to a local investor named Sanjay Gandhi for just over $11 million, according to people familiar with the deal.
That is a significant drop from the $29.7 million that Allstate paid in January 2022 for the 133,580-square-foot building, before rising interest rates and other factors pushed down property values.
The sale of 29 N. Wacker follows a series of discounted transactions because of weak office demand and a challenging lending environment. In one big example nearby, the 36-story tower at 333 W. Wacker Drive recently sold for $125 million, far below the last sale price of $320.5 million in 2015 at a time when values were soaring.
Allstate bought 29 N. Wacker as it was in the process of selling its 232-acre longtime corporate campus in Chicago’s northern suburbs, which, more than two years later, industrial developer Dermody Properties is well into the process of demolishing and replacing with a massive logistics campus.
At the time it bought the Chicago building, Allstate said it could be an investment property, a place to consolidate multiple Chicago offices, or potentially even the company’s headquarters. Allstate workers never moved into the building, and the insurer is now based out of space near its former campus in Glenview, Illinois. Allstate also has downtown Chicago offices in the River Point tower at 444 W. Lake St. and in the Merchandise Mart.
Allstate did not immediately respond to requests to comment on the sale from CoStar News. Gandhi, whose plans for the building are not known, declined to comment. The low-profile local investor’s other deals include buying office buildings at 218 and 226 S. Wabash Ave. in separate 2015 and 2018 deals for $17.55 million combined, according to CoStar data.
The sale comes as office markets in other cities across the country are also seeing lower valuations.
The building at 29 N. Wacker was just 57% leased when it went on the market for sale in February, according to a brochure from Colliers International. At the time, Allstate said that employees had the choice of remote, hybrid or in-person work, and that the company decided it no longer needed the Wacker Drive building as an option for additional office space.
Colliers brokers marketed it as an opportunity for a buyer to potentially add features such as a rooftop deck to help attract new tenants. The brochure also mentioned that existing zoning would allow a new owner to add about 80,000 square feet onto the existing tower, with a conversion to residential or hotel among allowable uses.
Built in 1961, the building stands out because of its relatively low stature among soaring Wacker Drive office towers. That includes the city’s tallest skyscraper a short walk south, 110-story Willis Tower at 233 S. Wacker.
For the Record
The seller was represented by Colliers International brokers Alissa Adler and John Homsher.