Brookfield Sells 1.4M SF Chicago Office Building At 87% Discount
A joint venture between 601W Cos. and David Werner Real Estate Investments is making another bet on Chicago office, just over a year after the same pairing helped to kick-start the sector's slow sales activity.
The venture bought the 1.4M SF office building at 175 W. Jackson Blvd. for about $41M, roughly 87% less than the $306M Brookfield Asset Management paid for the property in 2018. Northwind Group provided a $58.5M first mortgage to finance the acquisition and lease-up of the property, structured as a $33.5M initial advance at closing and $25M reserved to fund future leasing costs, the lender said in a release.
The property is in the Central Loop, taking up a full city block fronting Jackson Boulevard and Van Buren Street.
“This acquisition continues our thesis of high-quality assets in strong locations at a reset basis,” CEO David Werner said in a statement.
Brookfield Corp. has taken a beating on its office portfolio. From 2023 to 2025, the company totaled $3B in office buildings returned to lenders or sold at a discount, an October Bisnow analysis found.
As of June, the Jackson Boulevard property had a 53% vacancy rate and a weighted average lease term of 5.8 years, according to an archived JLL asset description. Famed Chicago architect Daniel Burnham designed the 22-story property, which was built in two phases between 1912 and 1927.
The property provides an investor the opportunity to “substantially increase” net operating income through leasing efforts, JLL said in its marketing materials.
Northwind touted the $24M in improvements completed by prior ownership, including a new amenity center and rooftop space. The lender said the recent capital investment, combined with a reset ownership basis and large floor plates averaging about 70K SF, positions the property to capture demand from large-format tenants downtown.
“We are excited to continue and expand our relationship with the sponsors, and to provide them with a flexible financing solution to revitalize the asset to its historically strong occupancy levels,” Northwind Group founder and Managing Partner Ran Eliasaf said in a statement.
Eliasaf said the “meaningful increase” in institutional capital reentering the Chicago office market and the gradual rise in leasing activity were promising. The acquisition of a high-quality asset at a low basis, combined with capital for property improvements, creates a meaningful advantage.
The same trio worked together on the purchase of 303 E. Wacker at the end of 2024, with Northwind providing the financing for the joint venture. The team leased more than 125K SF within a year of acquisition, according to Northwind, although net absorption figures weren't immediately clear.
When Eliasaf spoke to Bisnow about the 303 E. Wacker deal in January 2025, he said it wasn’t a signal of future deals, calling it a one-off where the stars aligned. He said he didn’t expect the company to lend on many more office buildings, but the price point was too good to pass up.
“I got to tell you, at a 35-bucks-a-foot basis, we feel comfortable with almost any building,” Eliasaf said at the time. “Basically, the value of the glass and the steel is more.”
At the time, Eliasaf predicted the next two years would be very challenging for the Chicago office market but that the rebasing of values would provide a “tremendous” opportunity to jump in on deals.
“Eventually, real estate is all about basis, basis and leverage,” Elisaf told Bisnow in 2025. “If you get the basis right and you're not overleveraged, you'll be OK.”
