A 57-story skyscraper in Chicago’s Loop business district has sold for about $85 million, becoming the largest office property to trade hands downtown in nearly three years.
Namdar Realty Group and Mason Asset Management completed their all-cash purchase of the tower at 70 W. Madison St. on Dec. 30, according to people familiar with the deal. The exact price could not yet be found in Cook County online property records on Tuesday.
The more than 1.4 million-square-foot tower is the largest to be sold in downtown Chicago by total leasable space since a controlling stake in Bank of America Tower traded hands in March 2022. That deal valued the 55-story, nearly 1.55 million-square-foot trophy tower at 110 N. Wacker Drive at more than $1 billion.
The largest office sale in Chicago by price since that time was a $125 million sale of the 36-story building at 333 W. Wacker Drive in June.
CoStar News first reported in November that the affiliated firms based in Great Neck, New York, planned to buy the tower at 70 W. Madison. That came after a deal to sell the building to Florida-based FRI Investors fell apart.
The sale of 70 W. Madison is the latest example of offices in Chicago and other cities selling at steep discounts to previous pricing after years of weak demand for corporate space and rising borrowing costs.
Another example of distressed office transactions in the Loop was Namdar and Mason’s deal last year to acquire the $74 million loan on the 47-story tower at 1 N. LaSalle St. at a steep discount to then seize possession from the previous owner.
Last year those firms also paid $54 million for the 45-story 200 Public Square office tower, the third-tallest structure in Cleveland, as well as paying more than $23 million for a retail property on Chicago’s Magnificent Mile shopping avenue.
Chicago firms Hearn and GEM Realty Capital teamed up with San Francisco-based Farallon Capital Management to buy 70 W. Madison for $374.6 million in August 2014, during a strong office leasing and investment sales market in Chicago.
They refinanced the tower with a $305 million loan from a group of lenders led by Bank of America in 2018. The lenders filed a $275 million foreclosure suit against the ownership group last year.
Hearn confirmed the deal was completed Dec. 30 but otherwise declined to comment.
Bank of America declined to comment. GEM and Farallon did not immediately respond to requests for comment from CoStar News on Tuesday.
CBRE brokers began marketing the tower for sale about a year ago. At the time, it was 68% leased with a weighted average lease term of 5.4 years, according to a CBRE brochure.
Tenants in the tower include law firms K&L Gates and Nixon Peabody.
The previous owners of the tower used the 2018 refinancing to fund more than $53 million in upgrades to areas including lobby facades and entrances, conference and fitness centers and other amenities, according to CBRE materials.
Those improvements, along with the far-lower investment basis, could give the new owners an advantage in filling blocks of vacant space.
For the record
The sellers were represented by CBRE brokers David Knapp, Blake Johnson and John Saletta.