Buyer Prepared To Pay $430M For McDonald's West Loop HQ

Courtesy of Sterling Bay
110 North Carpenter St. In Fulton Market

Sterling Bay and JPMorgan Asset Management are close to selling the 575K SF headquarters of McDonald's in Fulton Market to a high net worth family from the Pittsburgh area, according to a report Thursday morning from Crain's Chicago Business.

The proposed $430M deal for 110 North Carpenter St. wouldn't be the neighborhood's first blockbuster deal during the pandemic, a sign that properties fully occupied by blue-chip companies may continue to sell for big dollar amounts even though developers will deliver a number of office buildings without substantial pre-leasing in 2021.

Earlier this year, Germany-based Deka Immobilien paid $86M for 905 West Fulton Market, the 98K SF headquarters of Mondelez International.

The potential McDonald's sale would, if completed, be the highest price for a Chicago office building in nearly three years, according to Crain's, which cited data from Real Capital Analytics.

It would be a big payday for developer Sterling Bay. The firm paid $30.5M for the site once occupied by Oprah Winfrey's Harpo Studios complex, Crain's reports. Sterling Bay then took out a $209M construction loan to complete the project.

The opening of McDonald's headquarters, along with Google's headquarters nearby, helped make the neighborhood Chicago's hottest office market. But developers who launched projects just before the pandemic may have trouble filling up so much space.

Builders completed more than 1.1M SF in the area so far in 2020, Colliers International Senior Director of Research Sandy McDonald told Bisnow.

"Over half of these buildings that have been completed still have 44% or greater of the building available for lease," she said.

There is 1.8M SF of office space under construction, nearly 1M SF of which is expected to deliver by the end of the year, McDonald noted.

"Approximately 64% of these buildings that are expected to deliver next quarter will be vacant."

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