No tenant other than Google can ease a real estate investor’s mind amid the sturm and drang of a pandemic-filled year. Ok, maybe Amazon. But then Google.
Two Fulton Market office complexes the tech giant leases are selling to separate buyers for more than $500 million combined, according to Crain’s. The deals also highlight the continued strength of Chicago’s Fulton Market district, and are a sign that the city’s pulverized office market is slowly recovering.
In the larger purchase, Google’s Midwest HQ is going to an undisclosed buyer for around $360 million, according to the report. That’s about what landlord American Realty Advisors sought for the 520,000-square-foot complex at 1000 W. Fulton Market when it listed the property in late April.
The price is also about 20 percent over what ARA paid Sterling Bay for the 10-story building in 2016. That’s a hefty return in a city office market whose first quarter vacancy rate climbed to a 15-year high. Google occupies 387,000 square feet in the nearly fully-leased building.
In the other deal, Deka Immobilien is paying roughly $170 million for Sterling Bay’s 210 N. Carpenter Street complex. Google inked its lease for 132,000 square feet at the 200,000-square-foot building before construction completed in 2019.
It marks Deka’s second big office buy in Chicago in a year. The German real estate firm paid $85 million for an office complex at 905 W. Fulton Market in May 2020. Thor Equities developed that five-story, 98,000-square-foot building. It will be the future global headquarters of snack maker Mondelez International, which will occupy 77,000 square feet. Mondelez inked that lease in early 2019. Last year, droves of companies shed Downtown office space, canceled future plans, hit the sublease market or exited the city altogether.
[Crain’s] — Alexi Friedman