Office N Illinois

Sullivan Center, iconic Chicago Loop office building, sells for $176M

JLL facilitated the sale and financing of the 833,000-square-foot office component of Sullivan Center, an iconic commercial complex with coveted large floor plates in the heart of Chicago’s Loop. The buyer was New York-based 601W Companies. The sellers, a venture between New York-based private equity firm KKR and Madison Capital, had owned the property since 2016. It is currently 97 percent leased.

In addition to handling the sale, JLL also arranged acquisition financing for the buyer. The lender was Brookfield Asset Management. International director Bruce Miller and managing director Nooshin Felsenthal led the sale process. Managing director Keith Largay handled the financing.

“This asset received significant investor interest because of its excellent location, strong tenant base and the fact that it is one of the few larger floor plate buildings catering to the progressive tenants driving demand in this market,” said Miller. “At nearly full occupancy, it is clearly the type of property that tenants covet.”

Designed by famed archiect Louis Sullivan and completed in 1904, Sullivan Center offers creative office space featuring lofted ceilings and floor plates ranging from more than 100,000 square feet on the lower levels to between 22,000 and 79,000 square feet on the upper levels. Formerly a department store, the national historic landmark building saw its upper floors converted to office space in the early 2000s. Between 2001 and 2012, Sullivan Center underwent more than $200 million in renovations designed to modernize its mechanical systems and restore historical features.

“As rents for high quality creative office space have accelerated, investors recognized that Sullivan Center also represented an excellent opportunity to increase rental income significantly over time,” said Felsenthal.

The former owners previously sold Sullivan Center’s 176,000 square feet of retail space—the two lower floors and basement level—to Acadia Realty Trust in a separate $147 million transaction in August 2016. That space is currently occupied by a Target store.

“This was a competitive lending opportunity backed by an experienced sponsor and high quality asset,” said Largay. “We continue to find very aggressive capital in the debt markets for transactions of this caliber.”

Sullivan Center’s State Street location, in the heart of Chicago’s Loop submarket, provides tenants access to all seven CTA “L” lines. The property is also densely served by CTA bus service along State Street and Michigan Avenue as well as the new Loop Link BRT line and is within a brief walk of the Union, LaSalle Street, Millennium Park and Ogilvie Metra stations. Nearby attractions include The Art Institute of Chicago, Millennium and Grant Parks and the heavily trafficked State Street retail corridor.