Nuveen has switched from lender to owner of a prominent office tower along the Chicago River, with plans to pour funds into the property to add new tenants.
Chicago-based Nuveen took ownership of the 35-story tower at 321 N. Clark St. in River North, a spokesperson confirmed.
The ownership change comes nearly a decade after investors — including Chicago entrepreneur Larry Levy’s Diversified Real Estate Capital, American Realty Advisors and Hines — paid just over $340 million for the 896,502-square-foot tower in 2016.
The owners later refinanced the tower for $296 million in 2021.
Those investors have lost control of the property after years of reduced values for office properties in Chicago and other cities.
Nuveen, the investment manager of Teachers Insurance and Annuity Association of America, was among the lenders in the 2021 refinancing deal.
In the deal to take control of 321 N. Clark, Nuveen converted about $74 million of mezzanine debt to equity, according to The Real Deal Chicago, which first reported the ownership change.
It is the latest example of office towers being handed back to their lenders or selling at steep discounts to their pre-pandemic values. Yet many high-end towers along the river, such as 321 N. Clark, have outperformed the broader leasing market.
In a joint venture with Pacific Coast Capital Partners, Nuveen said it plans to invest in upgrades to bring in new tenants and improve the value of the tower.
“Nuveen is planning to further invest into the building by improving the tenant amenities, including an upgraded conferencing center and tenant lounge,” a Nuveen spokesperson said in an email to CoStar News. “We will operate the property with the same tenant-focused hospitality that we use across our national portfolio using technology and the onsite property team to provide an enhanced experience to the tenants.”
Chicago-based Diversified Real Estate Capital and Los Angeles-based American Realty Advisors did not respond to requests for comment from CoStar News. Houston-based Hines declined to comment.
The 896,502-square-foot tower, which was completed in 1988, is more than 77% leased, according to CoStar data. One tenant, property brokerage CBRE, recently left the property to move to the nearby, 60-story tower at 300 N. LaSalle St.
After seizing office buildings in recent years, many lenders have quickly looked to sell them off, even at a big loss.
But some lenders such as Nuveen, which also are experienced landlords, have chosen to invest more time and money to try to recover lost value over time.
Nuveen manages $1.4 trillion in public and private assets globally for clients on behalf of TIAA, according to the firm’s website. Nuveen has $142 billion in real estate assets under management throughout the world.
For the record
The new owners have hired Telos Group brokers Jeff Dowdell and Jack O’Brien to oversee leasing.