The Top 10 Downtown Office Building Sales of 2016
Last year's downtown office trading volume couldn't reach the record-shattering $6.2B of 2015, but there were still plenty of marquee assets that sold in 2016, along with Class-B and Class-C assets that yield-chasing investors gobbled up with an eye toward the future.
The top 10 office building transactions of 2016 still accounted for over $2.6B in transaction volume. Let's take a look at them, counting down to No. 1.
10. 1 North LaSalle
Buyer: Hilco Global, MB Real Estate
Seller: Jonathan Chetrit
With most of the marquee assets sold in 2015, investors checked down to Class-B and C assets, seeking solid yields through renovations. Hilco EVP Gary Epstein told Bisnow that the Hilco/MBRE JV sees the 47-story building as an attractive option for tech, media and advertising as downtown continues to evolve into a 24/7 live/work/play destination.
9. 333 South Wabash
Buyer: The John Buck Co
Seller: CNA Financial
John Buck closed on this deal in March, three months after announcing it would buy "Big Red." CNA will lease its 750k SF office footprint here until Buck delivers the new CNA Center at 151 North Franklin in summer 2018.
8. Old Main Post Office
Buyer: The 601W Cos
Seller: Bill Davies
After years of failed attempts to partner with other developers, Davies finally disposed of the 2.5M SF building in May, days before he died. Davies was long seen as the main obstacle to redeveloping the Old Main Post Office and Mayor Rahm Emanuel gave him an ultimatum: sell the building or the city would claim it under eminent domain.
7. 180 North LaSalle
Buyer: Ivanhoé Cambridge, Callahan Capital
Seller: Beacon Capital Partners
January was a quiet month for office activity, but the Ivanhoé Cambridge/Callahan JV made an early splash by completing a four-building, $325M deal it signed with Beacon in July 2015. Beacon bought the building for $126M in January 2014.
6. 440 South LaSalle
Buyer: CIM Group
Seller: TIER REIT
This was the beginning of a busy year for CIM and it wasn't even the firm's biggest acquisition. TIER REIT acquired this asset in a four-building, $832M deal in 2007.
5. Tribune Tower
Buyer: CIM Group, Golub
Seller: Tribune Media
The CIM-Golub JV emerged as the lead bidder for the landmark building last spring before finalizing the deal just before Labor Day. Ever since, speculation has run rampant over what CIM and Golub will do with it; Tribune Tower has emerged as an even more fascinating adaptive reuse play than the Old Main Post Office. With Tribune Media signing a lease at 303 East Wacker, we'll find out.
4. Sullivan Center
Buyer: Madison Capital
Seller: Elad Canada
Elad Canada had the former Carson, Pirie Scott building on the market for 18 months before Madison Capital made its offer. The acquisition was a complicated affair involving developer Laurence Freed giving up his majority stake in the building and Elad waiving a provision that prevented a buyer from maximizing the building's value by separately selling Sullivan Center's retail and office components.
3. 1K Fulton
Buyer: American Realty Advisors
Seller: Sterling Bay
Sterling Bay eventually sold this for less than what many experts predicted, but it's still an eye-popping number for one of the most notable Chicago adaptive reuse projects in years and a highlight of Sterling Bay's breakout 2016.
2. 321 North Clark
Buyer: Levy Diversified Real Estate
Class-A assets sell fast and Hines had no shortage of bidders for this 35-story River North tower once it went on the market in February. It also helped that Hines and Levy are frequent partners. Levy is an investor in Hines' 52-story River North tower and a partner in 1 South Dearborn.
1. AMA Plaza
Buyer: Beacon Capital
Seller: Riverview Realty Partners, Five Mile
The year's largest deal is one that almost didn't happen. LaSalle Investment and China Investment Corp agreed to buy AMA Plaza for $570M last March. That deal fell through for unknown reasons, opening the door for Beacon Capital to swoop in with a bid $100M lower.