Hines is reportedly in discussions to buy the former Boeing headquarters along the Chicago River after Sterling Bay's deal for the office tower was scrapped.
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Hines is after the 36-story, 776K SF office tower at 100 N. Riverside Plaza more than three years after the aerospace giant moved its operations from Chicago to Arlington, Virginia, CoStar News first reported. The deal hasn't yet closed, and Hines' target purchase price is unclear.
Sterling Bay, which was in talks to buy the large office building in July, has seen its deal fall apart. The developer told CoStar that its due diligence "did not support advancing a transaction in the current market conditions."
Sterling Bay's deal was reportedly in the range of $25M to $30M, which could provide a benchmark for a potential Hines deal.
Boeing is only selling the leasehold interest in the building, as the land beneath the tower is owned by New York-based Stahl Organization. A 99-year ground-lease agreement runs until 2084.
Hines would need to pull in enough rent to cover a ground lease with escalations over time unless it can also figure out an agreement for the land ownership, people familiar with the deal told CoStar. This could include partnering with the Stahl Organization on the Boeing purchase or coming to terms on a buyout that consolidates ownership of the building and the land.
Boeing inked a 15-year lease at the building in 2001 after moving its headquarters from Seattle, and it bought the tower for $165.2M in 2005. The largest tenant in the building is Here Technologies, which occupies almost 118K SF, according to CoStar.
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