Sterling Bay Nets Astounding Sevenfold Return On Pilsen Building
Sterling Bay made its name buying and rehabbing smaller infill properties for adaptive reuse. As the firm now sets its sights on bigger projects like building McDonald's West Loop headquarters, buying Prudential Plaza and redeveloping 40 acres along the North Branch Industrial Corridor's upper portion, it is selling those smaller properties at outsized returns.
Last month, Sterling Bay sold a former warehouse at 2229 South Halsted St. in Pilsen to SEIU Healthcare Illinois Indiana for $17.7M, nearly seven times what it paid for the building, Crain's Chicago Business reports. Sterling Bay paid $2.6M for the 68K SF building in 2009, in the immediate aftermath of the real estate collapse. It is not known how much Sterling Bay invested to adapt the property, but records show the firm borrowed $9.3M against the property in December 2011.
SEIU Healthcare consolidated its headquarters inside the building in 2012. The union financed the acquisition with a $13.3M loan through Amalgamated Bank of Chicago, according to Cook County property records. An SEIU spokesman said the union's executive board believed buying the building was the best use of its resources at this time. The building is along a section of Pilsen being targeted by investors for its infill opportunities.