A venture helmed by former Phoenix Suns owner Robert Sarver is reportedly in talks to acquire the old Groupon headquarters along the Chicago River in another major test of the city's office market.
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The 1.6M SF office building at 600 W. Chicago Ave. is expected to sell for a steep discount from the $510M Sterling Bay paid for the property in 2018, Crain's Chicago Business reports. Negotiations are ongoing between Sterling Bay and Sarver's venture, 3Edgewood, and the deal isn't a guarantee, sources close to the transaction told Crain's.
The building was about 96% leased as recently as 2023, but after Groupon terminated its lease early and left the space earlier this year, it is now just 62% occupied, according to the outlet. Groupon vacated 300K SF in the former Montgomery Ward catalog building, forking over a $9.6M fee to end its lease before it was up in 2026.
The property could benefit from nearby developments in the works, like Bally's planned hotel and casino project and Onni Group's multifamily megadevelopment, which are expected to increase foot traffic in the area.
Sarver formed 3Edgewood last year to invest in real estate and has already snagged a distressed 2.2M SF office property in suburban Dallas for $576M, a 30% discount. He paired up with another investor to buy a 3M SF office portfolio in Houston.
The businessman owned the Suns franchise for nearly two decades and also owned the WNBA's Phoenix Mercury. Sarver sold both teams in 2023 to mortgage executive Mat Ishbia in a transaction that reportedly valued the franchises at $4B.
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