Sterling Bay Reportedly Eyeing Buying Prudential Plaza

Aon Center, Chicago, IL
One And Two Prudential Plaza, And Aon Center, Chicago

Sterling Bay, which has been making deals and packing pipelines across Chicago the past two years, may be working on one of its biggest acquisitions ever. The 1K Fulton and McDonald's HQ developer is reportedly interested in buying Prudential Plaza for $680M, the Chicago Tribune reports. If the deal is completed, it would be the biggest sale price for a downtown office asset in two years.

The deal would also be Sterling Bay's largest acquisition to date. What may be attracting Sterling Bay to One and Two Pru the most is the opportunity to collect market-rate asset and property management fees and leasing fees at the 2.3M SF property. Prudential Plaza experienced a strong turnaround under its current owner, The 601W Cos. The firm and its partner, Berkely Properties, bought Prudential Plaza with an $85M recapitalization in 2013, when it was 57% vacant. It is now 27% vacant and Sterling Bay, known throughout the industry as a repositioning expert, could bring its expertise to further stabilizing the asset.

News of the potential sale comes on the heels of The 601W Cos. head Mark Karasick and Berkley Properties principal Michael Silberberg being accused in a lawsuit of defrauding investors of $83.8B when they refinanced the debt on the property two years ago.

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