The Top 6 Real Estate Stories of 2015
It was a year of record-setting and controversial deals in Chicago real estate. From nine-figure downtown office sales and all those downtown apartments in the construction pipeline, to proposals that led to debate over how public land should be used for private use, not a week went by without seeing something that piqued our interest. Here are the stories that stood out the most when we looked back at the year in Chicago real estate.
6. The Lucas Museum Debate
This is an Emanuel-backed deal that sparked debate over how lakefront should be used. The mayor offered to give filmmaker George Lucas the parking lot between Soldier Field and McCormick Place for Lucas to build his museum of narrative art. The land would only cost Lucas $1 annually. The greenspace advocacy group Friends of the Parks went to court, arguing the State of Illinois had the final say in granting the land to Lucas. The debate over the Lucas Museum became a campaign issue during the mayoral runoff election. Friends of the Parks' lawsuit is still pending.
5. The Obama Presidential Library Calls Chicago Home
Although there were rumblings the Barack Obama Foundation may have considered bids from New York and Hawaii, the option with the best chance of succeeding belonged to the University of Chicago from the onset. Although The University of Illinois Chicago offered up vacant, city-owned land, Mayor Rahm Emanuel wanted to give the Obama Foundation 20 acres of Park District land to build the library on one of U of C's proposed sites. Emanuel got his wish and now all the Obamas have to do is choose an architect and one of U of C's sites. If you're a gambler, place your money on the university's Washington Park proposal; U of C bought 10 acres surrounding the park in the past decade.
4. Waldorf Astoria Chicago Sells for $113M
Laurence Geller returned to the market in a big way this year, starting with his June acquisition of the Waldorf Astoria from Sam Zell. It was the second-largest hotel deal of the year, marked a nice ROI for Zell, who paid $95M for the former Elysian Hotel in 2011, and the average per-room sale of $601k for the 188-key hotel set a Chicago record. Geller has big plans for the Waldorf Astoria and value-adds are underway.
3. Sam Zell, Dealmaker
Zell was in selling mode for most of 2015. His Equity Commonwealth REIT sold Illinois Center to AmTrust Realty for a reported $376M. Starwood bought $5.4B in residential properties from Equity Residential in October. And his fire sale of nearly $2B in Equity Commonwealth assets resulted in a strong Q3 earnings report. It was more than enough for Zell to maintain his position as one of the country's richest real estate moguls.
2. Willis Tower Sells for $1.3B
In a record year for office building sales, it's fitting that Blackstone Group's March acquisition of Chicago's tallest building stood out from the rest, if only for the price tag. The final price fell just short of the $1.5B sellers Joe Chetrit and Joe Moinian sought. Blackstone Group also paid $11.4M in state and local real estate transfer taxes in the deal. Blackstone is planning $150M in renovations to Willis, including upgrades to the observatory and retail areas.
1. $6.1B in CBD Office Sales
Downtown office buildings were in high demand this year. The first six months of 2015 saw a slew of nine-figure deals for buildings ranging from Mid-Continental Plaza ($375M) and One South Wacker ($345M) to One North Wacker ($240M) and 550 W Adams ($185M). The momentum continued in the second half, with The 601W Cos' $712M acquisition of Aon Center leading the charge. Other notable deals in the final six months of the year included 333 W Wacker and 115 W Monroe, which sold for $315M each. The previous record of $5.3B was set in 2006.
