A nearly century-old office tower on Chicago’s Wacker Drive is for sale in a deal that may to continue a trend of landlords and lenders taking a financial hit on high-vacancy properties in downtowns throughout the country.
Cushman & Wakefield brokers have been hired to seek a buyer for the 41-story art deco building at 121 W. Wacker Drive, according to a brochure.
If the deal follows the recent trend in Chicago and other large cities, it is likely to come at a steep discount to the value of an approximately $71.3 million loan that Chicago-based owner Ameritus took out on the property in a 2022 refinancing. A building that trades hands for less than its debt is known as a short sale.
Ameritus and German lender Deutsch Pfandbriefbank, also known as PBB, are working together on a sale to resolve the recently matured loan, according to Crain’s Chicago Business, which previously reported the offering.
The tower at 121 W. Wacker is the latest opportunity for bargain shoppers to take over a well-located property overlooking the Chicago River at a steep discount to previous valuations in a bet on the long-term recovery of office demand.
Nearby, Great Neck, New York-based partners Namdar Realty Group and Mason Asset Management have a deal to buy the 40-story tower at 190 S. LaSalle St. after a previous buyer’s deal fell through, CoStar News first reported.
If that deal is completed, it would be the third big, heavily discounted office acquisition in the Loop by the affiliated firms from Long Island.
Ameritus, a longtime investor in vintage office properties led by Jeb Scherb, bought the property for $118.5 million in 2018, Cook County property records show.
Since then, vacancy has increased significantly, up to 37% today, with a weighted average lease term of just four years, according to the Cushman & Wakefield brochure. Tenants in the building are relatively small compared with many modern towers on Wacker Drive, with an average lease size of 5,164 square feet.
PBB declined to comment. Scherb did not respond to requests for comment from CoStar News.
The Wacker Drive tower was last renovated in 2017, before the sale to Ameritus, according to the brochure.
The offering is for nearly 97% of the tower, or 426,161 square feet, with some spaces separately owned as office condominiums, according to Cushman & Wakefield.
The property is for sale just a few months after Germany’s PBB announced plans to wind down its business in the United States.
For the record
The seller is represented by Cushman & Wakefield brokers Tom Sitz, Cody Hundertmark, Kelsey Berry and Jeremiah Olsen.