One of the highest-altitude retail spaces in the country is for sale.
The owners of the Signature Room restaurant and bar space on the 95th and 96th floors of Chicago’s former John Hancock Center have hired brokers from Cushman & Wakefield to seek a sale, according to the brokers and marketing materials.
The 26,168-square-foot property near the top of Chicago’s fifth-tallest skyscraper is hitting the market after its owners recently signed the longtime tenant to a long-term lease extension, according to the materials. There is no asking price.
The space near the top of the 100-story building is occupied by the Signature Room restaurant and the Signature Lounge cocktail bar.
New York-based Madison Capital and Newark, New Jersey-based PGIM Real Estate are seeking a sale in a challenging market because of months of rising interest rates and recent bank failures that have added further challenges to financing real estate deals.
It also is a challenging time for the surrounding blocks on North Michigan Avenue, where vacancy reached an all-time high on the longtime shopping and tourism corridor at the end of last year.
That has led investors to hand back some high-profile properties to their lenders, including the neighboring Water Tower Place. Lender-turned-owner MetLife is considering dramatic changes to the vertical mall, such as converting upper floors to new uses such as medical offices, CoStar News reported in February.
Medical Offices
The owner of the office portion of the former John Hancock, Chicago-based Hearn, is also looking to fill vacant space with medical offices.
Yet the brokers make the case that the high-profile Signature Room space remains a strong long-term investment, with the Signature Room’s operator now signed through the end of 2031. There also has been a $1.5 million investment of capital into the space, according to the Cushman materials.
With floor-to-ceiling windows and unobstructed views of Lake Michigan and the city’s skyline, the Signature Room has been a favorite among tourists since it opened in 1993.
The restaurant’s average annual sales would rank it among the 10 highest-grossing independent restaurants in the city, according to Cushman.
The 1970s skyscraper was known as the John Hancock Center until 2018, after the insurance company stopped paying for naming rights. It is now known by its address, 875 N. Michigan Ave.
The 1,128-foot-tall building has a mix of retail space, offices, parking, privately owned residential condominiums, an observatory and broadcast antennas.
Portions of the building were sold off to several real estate investors in a series of deals about a decade ago, including the retail owners’ $141.5 million purchase in 2012. They are not listing for sale a retail space on the bottom two floors of the tower that also was part of that acquisition, where tenants include a longtime Cheesecake Factory restaurant.
A PGIM spokeswoman declined to comment, and Madison Capital did not immediately respond to a request for comment from CoStar News on Friday.
Crain’s Chicago Business first reported the property is going on the market for sale.
Despite challenges on the Mag Mile in recent years, there have been signs of progress, including Los Angeles-based yoga apparel company Alo Yoga’s plans to open a flagship store in the former Disney Store space at 717 N. Michigan.
Last year, Canadian women’s clothing company Aritzia signed the largest retail lease on the street since 2015, taking over the entire three-level, 46,000-square-foot former Gap building at 555 N. Michigan.
Property sales have included Texas-based Silvestri Investments’ $94 million purchase of the Neiman Marcus flagship building.
Other owners also are looking to cash in, including a two-level space at 500 N. Michigan leased to Bank of America, Chick-fil-A and Vans that hit the market in January.
For the Record
The owners are represented by Cushman brokers Michael Marks, Evan Halkias, David Matheis and Eric Cline.