John Hancock's Receiver Selling Jewelers Building in Foreclosure

A landmark office tower that recently went into receivership is up for sale, nearly two months after a lender filed a $65 million foreclosure suit against Canadian landlord the Dorchester Corp.

Newmark brokers have been hired to market the 40-story Jewelers Building at 35 East Wacker Drive on behalf of John Hancock Life Insurance, the lender that sued Toronto-based Dorchester after it failed to fully pay $2.3 million due in property taxes and other charges by July 1, CoStar reported.

Earlier this year, Toronto-based Dorchester tried selling the building to pay off its $51 million mortgage before the summer maturity date, playing it up as an office-to-multifamily conversion opportunity — an increasingly common tactic among Chicago landlords as lingering remote-work trends and high interest rates continue to crush the city’s office sector.

It’s unclear how much the Jewelers Buildings could fetch in a sale, but a person familiar with the property expects offers to range between $50 million and $55 million. That’s less than the $65 million loan that John Hancock provided in 2013, highlighting the greatly diminished values of office properties in the Windy City since the pandemic hit. Dorchester, led by CEO Morris Shohet, has owned the historic building for more than 40 years.

Newmark is again emphasizing the possibility of a residential conversion, as well as continued office use in its marketing materials, the outlet reported. Plus, Newmark is bringing attention to the $118 million of renovations the tower has undergone over the past two decades. The 556,200-square-foot building is 71 percent leased, below the city average of roughly 77 percent.

“This is one of those downtown historic gems that’s had a lot of upgrades and renovations,” Newmark’s Jim Postweiler told the outlet. “This has a good chance of trading.”

Built in the 1920s, the Jewelers Building possesses a rich history. Infamous gangster Al Capone was rumored to have run a speakeasy at the site during the prohibition era, though historians have debated the veracity of such stories. The building’s name spawned from its unusual indoor parking and elevator system designed to protect jewelers from robbery while transporting highly valuable goods.

— Quinn Donoghue