Coworking firm Expansive took a 50 percent loss on an office building sale so it could shift from operating as a landlord to a tenant.
The Chicago-based firm sold its 50,000-square-foot River North building at 405 West Superior Street for $5.3 million this month after purchasing it for $10 million in 2018. The sale price dropped from $200 per-square-foot to $106 per-square-foot in seven years.
The deal provides more evidence that Chicago’s office market values are undergoing a significant reset following the widespread adoption of remote or hybrid work since the pandemic.
North Carolina-based nonprofit lender Self-Help Ventures Fund, an offshoot of Self-Help Credit Union, bought the seven-story, loft style office building and will occupy the third floor, while Expansive will continue to offer its coworking spaces. The building’s revenue is also supported by ground-floor retail tenants.
Newmark’s Mitchell Loveman and Jimena Sayavedra brokered the deal on behalf of Self-Help Ventures Fund, which provides loans to nonprofits.
Greenstone Partners represented Expansive in the transaction. The sale price was 97 percent of the listing price, according to a Greenstone social media post announcing the sale, indicating the sellers knew the market is in a much different position than it was in 2018. The post also indicated that some buyers are interested in jumping into the market at the right price. The listing received multiple offers from potential buyers across the U.S., the post said
Major discounts in Chicago haven’t been limited to office properties of a specific size. Last year, the Crain’s Communications building, a 41-story, 650,000-square-foot office tower, also traded for half of its last sale price. Chicago-based R2 bought the building for about $60 million after it last traded for $121 million in 2017.
Meanwhile, Expansive lost a separate River North office building to foreclosure last year. Amos Financial acquired its four-story, 31,000-square-foot building at 420 West Huron Street in River North via deed in lieu of foreclosure.
Expansive paid $5.2 million for the Huron Street building in 2016, according to Cook County records. A mortgage was issued by Bridgeview Bank, and Expansive later refinanced for $6.3 million with Wintrust.
Expansive, founded in 2009 by CEO Bill Bennett, has about 40 locations nationally, including five in Chicago.
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