On Dec. 30, Namdar Realty Group and Mason Asset Management acquired the 57-story office tower at 70 W. Madison St. in Chicago for $85 million. Spanning 1.44 million square feet, the building ranks among the largest recent acquisitions in the city. The $61-per-square-foot sale price also falls well below the $97-per-square-foot average for Chicago office properties through November 2024, according to CommercialEdge’s latest office report.

The transaction highlights a sharp decline from the building’s 2014 valuation of $374.6 million. Financial difficulties, including a missed loan payment that led to foreclosure proceedings by Bank of America, preceded the sale. The property was sold by a group including Hearn, GEM Realty Capital and Farallon Capital Management. Igal Namdar and Elliot Nassim represented the buyers.

70 W. Madison St., Chicago, IL

This deal exemplifies the ongoing trend of discounted office sales in Chicago and nationwide. Across the U.S., office properties averaged $179 per square foot in 2024 — down 9% from 2023 and  -24% from 2022. By November, 480 discounted transactions accounted for more than one-quarter of all office sales nationwide, surpassing the 389 recorded in 2023.

Chicago Sees Bigger Office Deals in 2024

Chicago recorded $948 million in total office sales through November 2024 to rank 11th nationally and lead the Midwest. Even so, this is slightly lower than the $992 million recorded during the same period in 2023, when Chicago ranked ninth nationwide. Despite the dip, 2024 marked the return of large transactions exceeding $50 million — a category that was absent from August 2022 through December 2023.

In 2024, at least five Chicago properties (including 70 W. Madison) traded for more than $50 million. The largest deal was the $125 million sale of 333 W. Wacker Drive, a 36-story tower acquired by Beacon Capital. Although this price failed to match the property’s 2015 valuation of $156 million, it nevertheless represented Chicago’s most expensive office transaction in more than two years. Notably, Beacon Capital reacquired the building at a steep discount, having sold it in 2004.

Another high-profile sale was the 41-story tower at 875 N. Michigan Ave., sold for $60 million — nearly half its 2017 price. Additionally, Murphy Development Group and InSite Real Estate are reportedly nearing the $70 million acquisition of 311 S. Wacker Drive, significantly lower than the $302 million paid in 2014.

Chicago’s office market mirrors broader Midwest pricing trends, with sale prices among the nation’s lowest. As of November 2024, Chicago averaged $97 per square foot, followed by Detroit at $80 per square foot. The Twin Cities, the only Midwest market surpassing $100 per square foot, still trailed the national average of $179 per square foot.