Chicago developer Jeff Shapack is selling another property with significant redevelopment potential.
Shapack and his investor Alec Litowitz want to offload 400 North Noble Street, a 57,000-square-foot former warehouse they recently transformed into high-end offices, featuring a basketball court and golf course simulator, for employees of Barstool Sports, a media company notorious for its raunchy content.
The sellers have hired brokerage Cushman & Wakefield to market the property, and they’re playing up its proximity to the hot Fulton Market District, as well as the cash flow offered by Barstool’s 40,000-square-foot lease for the property, struck last year. The tenant joined battery manufacturer Nanograf, a company co-founded by Chicago’s former deputy mayor Samir Mayekar that rents a nearly 18,000-square-foot space in the building.
The sellers didn’t include an asking price on the Cushman marketing flier, but the property is likely to sell for about $25 million, well more than the $6.5 million Shapack and Litowitz paid to buy it in 2019, according to people familiar with the property.
They’ve added value to it by repositioning the former warehouse as an office asset, with the capability to still host research and development operations like Nanograf’s. The landlords are also counting on a potential buyer’s chance to cash in on future development nearby, calling the deal a “long-term covered land play,” meaning it generates enough revenue for its taxes and a profit to the landlord all while accumulating value as prospectors anticipate a development boom in the area just west of Ogden Avenue. It’s also possible the building could be redeveloped at the end of the Barstool and Nanograf leases, as the site could hold 100,000 square feet of additional interior space under its zoning, according to people familiar with the property.
Shapack didn’t return requests for comment, and neither did the Cushman team marketing the property, which includes Cody Hundertmark, Tom Sitz and Dan Deuter.
The property falls within the planned manufacturing district zoning designation, which previously didn’t allow uses such as offices, retailers, restaurants and other services. But in 2019, the zoning district’s boundary was shifted slightly to the west by the Chicago City Council for a stretch between Ashland and Ogden avenues, in a bid to get more commercial development from the trendy Fulton Market to spill over without disturbing the industrial character of much of the Near West Side.
Barstool’s commitment to the property was an affirmation of the city’s strategy, and property owners may be able to gain even more flexibility if future development occurs — residential uses are still restricted, but if they’re ever allowed, it would be another boon for area property values.
This is the second property Shapack has listed for sale in recent weeks. Last month, an LLC with ties to the developer’s firm hired JLL brokers to market a 58,600-square-foot industrial building at 611 North Union Avenue, and they’re calling it a prime redevelopment opportunity.
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