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The Top 10 Downtown Chicago Office Building Sales Of 2017

An influx of new office product and cautious investor interest defined downtown Chicago office sales in 2017. The volume of this year's top 10 sales totaled $2.4M, 57% lower than 2015's record-setting $6.2B.

One distinctive pattern that emerged last year was a slowdown of activity in Q1 and Q4, with the majority of the year's top office trades happening in Q2 and Q3. Following are the top 10 office trades of the year in ascending order, based on available Cook County property records.

10. 500 North Michigan

500 North Michigan Ave., Chicago
500 North Michigan Ave.

Sale Price: $86M

Sale Date: July

Seller: Macerich

Buyer: Schapira

Macerich acquired the 347K SF tower for $71M in 2012 and had plans to connect it to its high-traffic Michigan Avenue retail asset, the Shops at North Bridge, and convert the lower floors to retail. The new ownership will work with developer David Bossy to renovate the property into mixed-use office and retail.

9. 150 North Michigan

150 North Michigan Avenue, Chicago
The Crain Communication Building, 150 North Michigan

Sale Price: $130M

Sale Date: September

Seller: John Hancock Real Estate

Buyer: CBRE Global Investors

John Hancock paid $102M for the 41-story tower with the distinctive angled diamond-shaped roof in 2012 and, despite a higher vacancy rate when it bought the asset, still saw a strong return on the property thanks in large part to its location next to Millennium Park. CBRE sees this as an opportunity to push rent growth.

8. 125 South Wacker

125 South Wacker, Chicago
125 South Wacker

Sale Price: $145M

Sale Date: April

Seller: MetLife

Buyer: Ivanhoé Cambridge/Callahan Capital

MetLife paid $109M to acquire the building in October 2012. JLL, which brokered the sale, marketed the 31-story tower as a redevelopment opportunity. For the Ivanhoé Cambridge/Callahan Capital joint venture, 125 South Wacker joins a downtown portfolio that includes 10 and 120 South Riverside, 180 North LaSalle and 515 North State St.

7. 123 North Wacker

123 North Wacker, Chicago
123 North Wacker

Sale Price: $147M

Sale Date: January

Seller: LNR Properties

Buyer: LaSalle Investment Management

This 30-story building was one of the highest-profile casualties of the 2008 market crash and was locked in a sticky bankruptcy for years before LNR assumed ownership of the building in February 2016. LaSalle Managing Director Joe Munoz said the firm is working on renovating the building to compete for tenants with other Class-A downtown properties.

6. 300 South Wacker

300 South Wacker, Chicago
300 South Wacker

Sale Price: $155M

Sale Date: May

Seller: Beacon Capital Partners

Buyer: Golub & Co./Alcion Ventures

Golub and Alcion's acquisition of this 35-story West Loop tower came amid a flurry of activity in the middle of the year that included the sales of 401 North Michigan, 311 West Monroe and the aforementioned 125 South Wacker.

5. 231 South LaSalle

231 South LaSalle, Chicago
231 South LaSalle

Sale Price: $165M

Sale Date: July

Seller: Berkeley Properties

Buyer: Beacon Capital Partners

Beacon Capital sees long-term value with the former Continental Bank Building. The asset was 82% leased at the time of closing, and net operating income dropped to $4.8M last year. But the value of the building increased because of higher valuations of comparable properties.

4. Sullivan Center

Sullivan Center, Chicago, IL
Sullivan Center

Sale Price: $179M

Sale Date: September

Seller: Madison Capital/KKR

Buyer: The 601W Cos.

Madison Capital had only bought the landmark Sullivan Center in a complicated $267M deal in April 2016 before it decided on a quick cash-out and sought bids as high as $200M. But the sellers still saw a strong exit because the joint venture was able to sell the office and retail portions separately. Madison Capital sold the retail portion of the building to Acadia Realty Trust for $147M in August 2016.

3. 401 North Michigan

401 North Michigan Avenue, Chicago
401 North Michigan Ave.

Sale Price: $350M

Sale Date: May

Seller: Walton Street Capital

Buyer: Zeller Realty

Zeller's repositioning of the 35-story building paid huge dividends when Walton Street agreed to buy the asset in May. The property's value was enhanced by capital improvements like Apple's new $27M Michigan Avenue flagship store and improvements to the riverwalk adjacent to the building.

2. 181 West Madison

181 West Madison, Chicago
181 West Madison St.

Sale Price: $360M

Sale Date: February

Seller: CBRE Global Investors

Buyer: HNA Group

CBRE put the 50-story tower on the market in December 2015 and waited as investor interest cooled after a record-setting 2015 for close to the $400M price it sought. HNA is now contemplating a sale of U.S. and Australian real estate holdings amid pressure from the Chinese government to regulate the flow of outbound capital.

1. Prudential Plaza

Prudential Plaza, Chicago
Sterling Bay's acquisition of Prudential Plaza was the biggest downtown office deal of 2017.

Sale Price: $680M

Sale Date: July

Seller: The 601W Cos.

Buyer: Sterling Bay

Sterling Bay crowned its transition from an adaptive reuse specialist to a buyer of trophy assets with its largest acquisition to date. The ability to collect market-rate asset management and leasing fees at the 2.3M SF property were a major attraction, and Sterling Bay is already building on the work of 601W Cos. in turning the formerly beleaguered property around. The Chicago Tribune's parent company, Tronc, agreed last August to move its offices to Prudential Plaza in mid-2018.