A Chicago apartment complex that late billionaire Sam Zell owned for decades is set to be sold to a key player in the biggest deal of Zell’s colorful career, the $39 billion sale of Equity Office Properties Trust in 2007.
Former Blackstone real estate executive John Schreiber is under contract to buy the 292-unit Cobbler Square Lofts property in Old Town, according to people familiar with the situation. The sale price, which may include the assumption of an existing loan, could not be determined.
Cobbler Square had been owned by Zell since the property was converted from a shoe factory to apartments in the 1980s. The property at 1350 N. Wells St. went on the market for sale in May, about a year after Zell’s death at age 81.
Schreiber declined to comment to CoStar News. One of Zell’s former firms, Equity Group Investments, did not immediately respond Monday to a request for comment.
If the deal for the former Dr. Scholl’s shoe factory is completed as expected, it would be the second large multifamily acquisition this fall by Centaur Capital Partners, Schreiber’s Lake Forest, Illinois-based family office. Schreiber recently teamed up with Chicago’s JDL Development to buy the 29-story, 227-unit Parker Fulton Market apartment tower in the city’s former meatpacking district for $93.3 million.
The pending deal on Chicago’s North Side comes with a connection to private equity giant Blackstone’s biggest real estate deal during the tenure of Schreiber, who retired in 2015.
Years after helping launch Blackstone’s real estate business, Schreiber was involved in the firm’s $39 billion buyout of Zell’s office real estate investment trust in early 2007. At the time, it was the largest private real estate transaction ever completed.
When Zell died last year, he was remembered as an industry pioneer whose accomplishments included popularizing the REIT model and pulling off headline-grabbing deals such as the sale to Blackstone.
Schreiber remains a well-known figure in Chicago real estate and philanthropy, including major donations to his alma mater, Loyola University Chicago.
He was a mentor to Jonathan Gray, who spearheaded Blackstone’s buyout of Equity Office. Gray, a Chicago-area native, is now Blackstone’s president and chief operating officer.
Cobbler Square previously was a factory for Western Wheel Works, then the world’s largest bicycle maker, in the late 1800s, according to JLL. Dr. Scholl’s shut down a shoe factory and headquarters at the property in 1981.
A Zell-led venture undertook a residential conversion that was completed in 1985.
When JLL brokers began marketing the property in late May, the complex was 94% occupied, with rents averaging $2,095 per unit and $2.65 per square foot.
It was presented as a chance to boost rents by renovating units and to build a five-story, 26-unit expansion atop the southwest corner of a 177-space parking garage, pending city approval.
Cobbler Square structures range from three to five stories, and there also is just over 19,000 square feet of retail, according to a JLL brochure.
A loan on the property, with a 3.8% interest rate and a 2034 maturity, is available to be assumed by the buyer, according to JLL materials.
The $51 million loan was taken out from Wells Fargo in a 2019 refinancing, Cook County property records show.
For the record
The seller is represented by JLL brokers Mark Stern, Kevin Girard, Zach Kaufman and Sam Grohe.