The new owner of 36-story office tower at the bend of the Chicago River has completed a $32 million renovation and added new tenants in the process, extending a trend of fresh investments lifting well-known but decades-old properties.
Beacon Capital Partners said it has completed several upgrades in the tower at 333 W. Wacker Drive that is known for a green glass exterior that reflects the river, sky and nearby skyscrapers.
Bolstered by the improved amenities, the Boston-based investor said in a statement that it has increased occupancy from 83% to 90% since buying the tower for $125 million in June 2024.
“We believe in the city of Chicago and in the long-term value of well-located, amenity-rich office environments, and 333 W. Wacker is a perfect example of how strategic investment and thoughtful leasing can drive tangible success,” Greg O’Neal, a managing director at Beacon, said in a statement.
Designed by Kohn Pedersen Fox and completed in 1982, the 895,059-square-foot tower is the latest example of an older-generation office tower overcoming years of sluggish office demand with new capital.
Other examples include the 41-story tower at 150 N. Michigan Ave. that is now branded as the Diamond, the two-tower Prudential Plaza complex and the Chicago Board of Trade Building.
The Wacker Drive tower has several characteristics of properties that have outperformed the market, including unique architecture, river views and proximity to public transit. The newest trophy towers along the river command the highest rents in the city.
Upgrades and additions at 333 W. Wacker include a spruced-up lobby, two-level fitness and wellness center, rooftop tenant lounge and conference center with skyline views, outdoor terrace and ground-floor cafe, according to the statement.
Beacon also said it plans to complete three furnished, high-end suites totaling 30,000 square feet in November.
“The building has always been an architectural icon, but today, it’s a fully modern workplace, with best-in-class amenities and an ideal location that’s unbeatable for tenants and commuters alike,” Jack O’Brien, one of the Telos Group brokers who oversees leasing in the building, said in the statement.
New property improvements were part of previous ownership’s agreement to buy the tower last year at a steep discount to previous values. It is the second time Beacon has owned the tower, after Beacon and Chicago developer John Buck sold it for $208 million in 2004.
The latest deal came at a discount to the $320.5 million that the pension fund of the AFL-CIO paid during a peak market in 2015, and also well below the value of a $156 million in debt the previous owner had from German’s Allianz Life Insurance.
Beacon’s purchase was backed by new debt of up to $185 million from Allianz, according to Cook County property records.
The purchase agreement required Beacon to carry out the extensive renovations as part of a long-term lease extension that the property’s largest tenant, Nuveen, signed with the previous owner.
Beacon said it has signed more than 205,000 square feet of new leases and renewals since taking over the building. New deals include about 28,000 square feet leased to JBT Corp., about 22,000 to Forvis Mazars and about 15,000 to Eclipse Business Capital, according to the statement.
Those leases help demonstrate the importance of funds to invest in amenities and new leases at a time when many landlords in Chicago and other cities are handing back properties to their lenders or selling for a loss.
Beacon has felt those struggles in Chicago. Beacon has sold the 30-story tower at 303 E. Wacker Drive at a loss, is set to do the same with the 40-story tower at 190 S. LaSalle St. and faces a foreclosure suit on the Ludwig Mies van der Rohe-designed AMA Plaza tower.
Despite its recent struggles in Chicago, Beacon is credited by real estate professionals for helping revive a once-frozen market for downtown office sales. Its purchase of 333 W. Wacker was the highest-priced office sale in the city in more than two years, and it was followed by a burst of deals a few months later.