Allstate is looking to sell a 10-story office building in Chicago’s Loop business district about two years after acquiring it with plans to potentially move the company’s headquarters to the property.
The insurance giant has hired Colliers International brokers to find a buyer for the 133,580-square-foot building at 29 N. Wacker Drive, according to marketing materials from the brokerage.
Allstate bought the building for $29.7 million in January 2022, saying at the time that it could be an investment property, a place to consolidate existing downtown offices or possibly its new global headquarters.
At the time, Allstate was in the process of selling its 232-acre corporate campus in the northern suburbs for $232 million, which industrial developer Dermody Properties is now converting into a logistics campus.
“Our employees have flexibility in where they work and many choose to work from home or out of an office a few days a week,” Allstate said in an emailed statement to CoStar News. “We bought this building to give us options when there was less certainty about what work would look like after the pandemic, and we no longer need this space with our existing Chicago area offices.”
The 63-year-old Wacker Drive structure is likely worth far less than the amount Allstate paid after several interest-rate hikes, continued remote and hybrid work schedules, and other factors weighing down property values, particularly in the office sector, according to people familiar with the property.
One recent example of falling office values was Chicago developer R2’s $60 million purchase of the 41-story office tower at 150 N. Michigan Ave., which had last sold about twice that amount in 2017.
That was the first office sale of more than $50 million in downtown Chicago since mid-2022.
Allstate has offices near its former headquarters in the suburbs, as well as downtown offices in the River Point tower at 444 W. Lake St. and in the nearby Merchandise Mart.
The building Allstate looks to sell is small compared with rows of office towers along Wacker Drive. Existing zoning would allow a buyer to add about 80,000 square feet on the property in a redevelopment, and a switch to multifamily or hotel use also would be allowed, according to the Colliers brochure.
Allstate’s plans to sell the building were previously reported by Crain’s Chicago Business.
The property is just under 57% occupied, meaning a buyer may need to invest extensively to fill vacancies or change uses for the property. Colliers mentions adding rooftop amenities as one potential upgrade to help attract new tenants.
Colliers also mentions a three-floor, approximately 43,000-square-foot block of available space as an option for an owner-occupant.
For the Record
Colliers International brokers Alissa Adler and John Homsher are representing Allstate in the sale.