The Big Ten Network has signed a long-term extension to keep its offices and television studio in a sprawling former Montgomery Ward warehouse along the Chicago River, notching a victory for the Arizona-based investor that bought the property at a steep discount early this year.
The Big Ten Conference's sports network and landlord 3Edgewood confirmed the recent completion of a long-term deal for the 58,000-square-foot space at 600 W. Chicago Ave.
It comes after the Big Ten Network explored a move out of the 1.6 million-square-foot building, where the first college sports conference to launch its own network first went on the air in 2007.
The extension for an undisclosed number of years comes after 3Edgewood, the real estate investment arm of Robert Sarver, the former owner of the NBA’s Phoenix Suns, bought the ultrawide building in January.
Sarver’s firm bought the building for $88.7 million, a fraction of the $510 million that it previously sold for in 2018. That discount is one of the most dramatic seen in Chicago and other large cities in the aftermath of falling occupancy and valuations after the onset of COVID-19 in early 2020.
“We know it’s important right now for a landlord to show that they’re willing to do what it takes to retail tenants and go get new ones,” Jordan Mellovitz, 3Edgewood’s head of real estate, told CoStar News. "We’re spending money across the building. That will start to show soon.”
The Big Ten Network explored relocation options including Prudential Plaza near Millennium Park, the wide office building at 350 N. Orleans St. near the Merchandise Mart in River North and the James R. Thompson Center in the Loop that Google is in the process of redeveloping as its future Chicago office home.
Savills broker Robert Sevim, a former Northwestern University tennis player who represented the network in the search, said the tenant decided the best option was to stay put amid massive changes to the college sports landscape.
Since the network first went on the air, the conference has grown from 11 teams to 18. During that time, other conferences have created their own networks, and high-profile programs have shifted leagues.
The new deal at 600 W. Chicago Ave. includes increased signage and expansion options, he said.
“Each of those other buildings had really interesting opportunities for the Big Ten that were intriguing,” Sevim said. “Ultimately, I think their decision to stay was driven by the rate of change that is occurring at the conference level and their ability to expand contiguously.
“It’s also expensive to move. There is a financial benefit to staying.”
The network declined to comment beyond confirming the long-term extension.
Department-store chain Montgomery Ward opened the Chicago Avenue building in 1908 as the Catalog House, a warehouse from which merchandise was shipped to fill mailed-in orders from thick catalogs.
After being converted into offices, the structure previously was known as the headquarters of Groupon as that Chicago company grew into more than 290,000 square feet. After setbacks, that company is no longer a tenant, and the property is about 36% vacant today, according to CoStar data.
Mellovitz said 3Edgewood is in the process of investing more than $20 million on upgrades such as a new entertainment lounge for tenants with gaming screens and poker tables, covered terraces within spaces the firm is looking to lease, and adding new food options such as a market in lobby.
During morning and afternoon commuting hours, 3Edgewood already has been chartering a water taxi to transport employees to and from commuter trains in the Loop and to show tenants and brokers the building, Mellovitz said. The firm plans to continue the boat rides.
“It’s really important that we’re spending money on the building,” Mellovitz said. “Employers know they need an exciting place for their workers.
“We’re a new landlord in Chicago. Getting the Big Ten Network lease done, it helps introduce us to the market. It’s important to let people know that we’re going to play ball.”
For the record
The tenant was represented by Savills broker Robert Sevim. The landlord was represented by Sterling Bay broker Austin Lusson.