Menashe Properties has struck a nearly $60 million deal to buy a 38-story office tower across the street from Google’s future Chicago home in the Oregon investor’s third recent bet on a recovery of the Loop business district.
Portland-based Menashe has a contract to buy the nearly 862,000-square-foot building at 180 N. LaSalle St. from Canadian owner La Caisse, according to people familiar with the situation. An exact price could not be determined, but it is believed to be between $55 million and $60 million.
That would be a huge discount to the $198.5 million that La Caisse — the real estate investment arm of Quebec’s largest pension fund, then known as Ivanhoé Cambridge — paid in January 2016.
The deal, which would be the second involving Menashe and La Caisse in less than a year, has not been completed and still could fall apart.
The LaSalle Street tower is directly across the street from the Thompson Center, a Helmut Jahn-designed building previously owned and used for offices by the state of Illinois.
Local real estate investors Prime Group and Capri Investment Group are in the process of redeveloping the glassy building known for its soaring atrium, with Google set to buy and occupy the building. Morningstar is in talks to lease a large block of office space from Google for the investment research firm’s new headquarters, CoStar News reported last month.
City backers and real estate investors are hoping that Google’s project, one of the most closely watched real estate projects in the city's history, will provide a lift for the central part of the Loop, where some office properties are being converted to new uses such as apartments amid historically low demand.
In another recent deal involving offices near the Thompson Center, Canada’s Onni Group paid $125 million for the 50-story tower at 161 N. Clark St.
If Menashe’s deal for 180 N. LaSalle is finalized as expected, it will be the third office property acquired in the Loop by Menashe in less than three years — all at significant discounts from previous, pre-pandemic valuations.
The pending, off-market deal follows Menashe’s $51.5 million purchase of the 31-story tower at 125 S. Wacker Drive from La Caisse late last year.
The latest deal comes more than a year after La Caisse blamed the performance of the New York and Chicago office markets for a sizable drop in its annual earnings in 2024.
Yet some investors such as Menashe are betting that properties in good locations and with funds to pursue new leases will recover much of their lost value in the years to come.
CEO Jordan Menashe declined to comment on the pending 180 N. LaSalle deal, but he reiterated the firm’s bullish stance on Chicago.
“The Chicago office market, for well-located assets with ample capital available to do new deals, is continuing to show massive signs of strength,” he told CoStar News.
The firm’s first Chicago deal was the $45 million acquisition of the 29-story tower at 230 W. Monroe St. in September 2023. That deal ended a drought of more than a year without any major office sales in downtown Chicago amid the aftereffects of COVID-19, interest-rate increases and other factors.
About two years after the all-cash acquisition, following a run of new leases and renewals, Menashe took out a loan for the full value of the $45 million purchase price, a financing that stood out nationally after years of struggles in the office sector.
La Caisse declined to comment on the pending sale of 180 N. LaSalle.
Its other Chicago investments include neighboring towers along the Chicago River at 10 and 120 S. Riverside Plaza and a tower at 515 N. State St. in River North.
Built in 1976, the tower at 180 N. LaSalle is about 64% leased, according to CoStar data.