Mike Drew Buys North Side Chicago Office Building for $10.5M

Veteran Chicago developer Mike Drew has reclaimed ownership of a boutique office building on the city’s North Side, with plans to give it new life as apartments.

An investment group led by Drew bought the four-story, 100,000-square-foot building at 1333 North Kingsbury Street for $10.5 million, about seven years after selling it to an affiliate of Swiss bank Credit Suisse for $27.8 million, CoStar reported.

The recent sale equates to about $105 per square foot, compared to $278 per square foot in 2017. JLL brokers Jaime Fink, Bruce Miller, Patrick Shields, Sam DiFrancesca and Jennifer Hull represented the seller.

Drew aims to convert the building into about 200 apartments. Such conversions have become an increasingly common trend in the Chicago area as remote-work trends and other economic challenges drive up office vacancies to new heights and crush property values.

The dramatic price drop from when the property last sold was a motivating factor behind Drew’s decision to purchase. Even though Drew has an office-to-residential conversion in mind, it’s possible that he could maintain it for office use.

The building, which is 80 percent occupied, has several tenants with upcoming lease expirations. The largest, college sports recruiting network NCSA, is planning to vacate its 21,700-square-foot space.

“We’re looking at potential office leases in the office building,” Drew told the outlet. “If the leases come through, namely to replace NCSA, we’ll keep it as an office building. Otherwise, we’ll proceed with a redevelopment to residential.”

Drew is in talks with city officials to secure a zoning change, a move he’s confident about given his plan to reserve 20 percent of units as affordable housing.

The building is surrounded by retail giants like Apple and Whole Foods, affluent neighborhoods and forthcoming large-scale developments, including Sterling Bay’s Lincoln Yards megadevelopment and the city’s first casino complex.

—Quinn Donoghue