Starwood Capital Group is entering the downtown Chicago office market in a big way. The firm, which has retail and hospitality holdings in the area, finalized its $360M acquisition of One South Dearborn. The acquisition closed on Jan. 24, according to Cook County records.

The tower's former owner, Olen Properties, placed the building on the market in September and was seeking $400M bids. Its anchor tenant, law firm Sidley Austin, renewed its 575K SF lease in December and will remain in the building through 2030. But its second-largest tenant, Constellation Brands, is leaving behind 118K SF this spring.

Starwood is entering the downtown office market as new inventory sends vacancy rates rising; One South Dearborn's occupancy rate will drop to 88% after Constellation Brands leaves. Starwood Capital Head of Capital Markets Austin Nowlin called One South Dearborn "one of the top office properties in Chicago's Loop" in a statement.

Olen Properties bought One South Dearborn from Hines for $350M in 2006. ING Capital arranged a $297.6M financing package for Starwood to acquire the building, including a $235.1M senior loan. ING expects to syndicate the senior loan in the coming weeks.