New York real estate investors Foundation Capital Partners and Nightingale Properties, are buying two separate Loop office buildings in Chicago’s Loop, marking their first forays into the Chicago market.
Foundation will pay $180 million for a 26-story office building at 2 N Lasalle Street, Crain’s reported. Nightingale is close to completing the purchase of a 29-story building at 200 W Jackson Boulevard for almost $132 million.
The LaSalle Street property was sold by a joint venture between Chicago’s Hearn and New York’s Fortress Investment Group, which paid $42 million for a majority interest in the building in 2016. The recapitalization came after the building’s owner, Harbor Group International, risked defaulting on a $127.4 million loan it took out when it bought the property in 2007.
Read more
Commercial
Chicago
Lender shopping $66M note on South Barrington retail center
Fortress and Hearn renovated the lobby and added a tenant amenity floor. In 2019, the city of Chicago signed a 15-year lease for almost 223,000 square feet. That lease is set to expand to just under 300,000 square feet by 2023, which would make the tower 85 percent leased.
As for the Jackson Boulevard building, owners White Oak Realty Partners and Angelo Gordon would finally be able to cash in a property they’ve been trying to unload since before the pandemic. The duo reached an agreement with New York Life Real Estate Investors in early 2019 to sell the property for $150 million, but that deal fell through. While the building is 94 percent leased now, compared with 85 percent two years ago, Nightingale would be paying less than New York Life was prepared to spend.
According to data from Real Capital Analytics, sales of Chicago-area office buildings totaled about $1.4 billion in the first nine months of 2021, down three percent from the same period in 2020. Chicago was one of only four markets among 25 tracked across the country where year-over-year office sales volumes fell. The other markets are Manhattan, Los Angeles and Northern New Jersey.
[Crain’s] — Victoria Pruitt