Chicago Office Tower Sells for 75 Percent Loss as Multifamily Trading Stays Active
A 441,000-square-foot office tower on Wacker Drive recently traded for $30 million, representing a significant valuation drop from its 2018 sale price. According to reporting from Bisnow, the deal highlights a period of price correction for historic downtown assets even as suburban multifamily properties continue to command high-volume investment across the region.
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Context from Industry Pulse
The recent Chicago transactions illustrate a stark divergence between asset classes. The 75 percent loss on the Wacker Drive office tower reflects the ongoing distress in urban commercial cores where valuations are being reset to levels unseen for years. Conversely, the multifamily and retail sectors show resilience. The $68 million sale of Webster Place, which doubled in value over three years, suggests that well-positioned retail assets near major developments remain highly sought after. Additionally, the launch of a $135 million residential trust in McHenry and high-occupancy rates in suburban apartments indicate that investor appetite for Chicago’s residential footprint remains robust despite the volatility seen in the downtown office market.
"The property has a remarkable history, an irreplaceable location and a presence in the Chicago skyline that deserves thoughtful stewardship."
Local investors Ken Buckman and Robert Castillo acquired the office property at 121 West Wacker Drive from Ameritus. The sale price of $30 million marks a 75 percent decrease from the $118.5 million Ameritus paid for the tower in 2018. The buyers intend to provide significant capital for the revitalization of the 41-story structure, which was originally completed in 1930. Cushman and Wakefield represented the seller in the transaction.
While the office sector faces steep valuation adjustments, the Chicago multifamily market remains active with several high-value exchanges. As Bisnow reports, an affiliate of Equus Partners purchased the 226-unit Ashford at Geneva complex for just over $56 million from Oak Residential Partners. Newmark brokers handled the sale of the suburban community. Further activity in the residential sector included Grand Lifestyles paying $63.4 million for a 400-unit complex in Wheeling, acquiring it from a venture involving DRA Advisors and Marquette Companies.
Investment also flowed into adaptive reuse and specialized residential assets. ICM Properties purchased The Medallion, a 72-unit apartment building in Lakeview that was formerly a parking garage, for $31 million. The seller, JSM Venture, had originally acquired the 1928-era site for $5.8 million in 2016. Additionally, Cunat launched a Delaware statutory trust offering seeking $56.2 million in equity for a 540-unit community in McHenry, which the firm recently developed and sold to the trust for $135 million.
Retail and commercial developments are also seeing movement. Novak Construction sold the Webster Place retail center in Lincoln Park for $68 million to a venture led by Mehrdad Mottahedeh. This price is more than double the $29 million Novak paid for the site in 2021. Meanwhile, GlitterStarz Inc. purchased a 30,000-square-foot building in Woodridge to accommodate business growth, and The Missner Group began a modernization project for a Mercedes-Benz dealership in Northbrook.
The Industry Pulse Bottom Line
Chicago is currently a bifurcated market where historic office assets are experiencing massive price corrections while suburban multifamily and strategically located retail properties continue to generate significant appreciation and investment volume.