Tall & Urban News

The owners of the Chicago Board of Trade Building are putting the landmark tower up for sale, looking to cash out with a big profit as investors continue to bet on the downtown office market.

A joint venture of Chicago-based developer GlenStar Properties and Los Angeles-based private-equity firm Oaktree Capital Management is seeking more than $330 million for the 44-story office building at 141 W. Jackson Blvd.

A sale at nearly $240 per square foot ($2,583 per square meter) would dwarf what the building overlooking the Loop’s financial corridor has traded for in recent years, netting the owners a big gain after major renovations and a flurry of leasing activity.

It would also set a high bar for office property values along LaSalle Street, where some landlords have started to invest heavily in modernizing older buildings to compete with new supply. A boom in demand for downtown office space driven by companies wanting access to Chicago’s pool of young talent near the urban core has boosted investor demand and allowed many landlords to cash out with hefty returns.

GlenStar paid about $152 million in 2012 for the nearly 1.4 million-square-foot (130,000-square-meter) property in a joint venture with USAA Real Estate, according to Cook County property records, and subsequently put $35 million into the building for technological and other upgrades, executives said in 2018. GlenStar recapitalized the property in late 2014, swapping out USAA for Oaktree and taking out a $160.8 million mortgage on the historic building, property records show.

The owners then refinanced the building with a new $177.7 million loan in May 2017, when it was appraised at $275 million, according a Bloomberg report tied to the loan. A portion of that mortgage was packaged with other loans and sold off to commercial mortgage-backed securities investors.

The building today is 21 percent vacant, a much higher share than the 13 percent average vacancy for downtown office buildings, according to CBRE. But a surge of new leases in recent years has driven up the value of a tower that was half-empty when GlenStar bought it seven years ago.

The property posted $7.2 million in net operating income in 2018 from about $30 million in top-line revenue, according to the Bloomberg report.

Known for its open-outcry trading pits and the faceless aluminum statue of Ceres, the Roman goddess of agriculture, that stands atop its roof, the CBOT Building was built in 1930 and stood as Chicago’s tallest building until 1965, when it was supplanted by the Richard J. Daley Center. The Art Deco tower, which had cameos in movies like “Ferris Bueller’s Day Off” and “The Dark Knight” and served as the studio home for the 1970s TV dance show “Soul Train,” was designated a Chicago landmark in 1977 and listed on the National Register of Historic Places in 1978.

For more on this story go to Crain’s Chicago.