Brookfield Fund Snags Chicago Office Tower for $305M

By Gail Kalinoski

175 W. Jackson in Chicago

In a $305 million deal, a private real estate fund sponsored by Brookfield Asset Management has acquired 175 W. Jackson, a 1.4 million-square-foot, Class A tower built in 1912 in Chicago’s Central Loop submarket.

JLL Capital Markets, led by International Director Bruce Miller and Managing Director Nooshin Felsenthal, represented the seller, an ultra-high net worth European family advised by Extell Development. The owners had purchased the 22-story property in 1998 and reportedly spent about $100 million in renovations to modernize the tower, which was designed by famed Chicago architect Daniel Burnham. Recent upgrades include a 7,500-square fitness center, a conference center and rooftop decks.

“The next stage of 175 West Jackson’s life as a progressive downtown Chicago work environment will be exciting to see. Brookfield is a globally recognized asset manager with a stellar reputation and an innate ability to find and execute value-add strategies that redefine buildings,” Miller said in a prepared statement.

Office tenants include Enova International, Wolverine Asset Management and the Chicago office of the U.S. Securities & Exchange Commission. Located in the city’s financial district, nearby buildings include the Federal Reserve Bank of Chicago, the Chicago Mercantile Exchange/Chicago Board of Trade and the Chicago Stock Exchange.

Retail tenants on the ground floor include numerous restaurants as well as CVS, Fifth Third Bank and Liberty Travel.

The building is also near Willis Tower, the 110-story, 4.6 million-square-foot skyscraper undergoing a major redevelopment estimated to cost more than $500 million.

“The timing of the opportunity was excellent as 175 West Jackson is positioned to benefit from the billions of dollars of investment in surrounding projects,” Felsenthal said in a prepared statement.

Chicago Office Sales

The city’s Loop has seen numerous office buildings change hands so far this year, including One South Dearborn, a 40-story, Class A tower in the Central Loop that was sold by Olen Properties to Starwood Capital Group, for an undisclosed amount. The sale marked Starwood Capital Group’s first purchase in Chicago’s downtown office market.

Miller and Felsenthal’s team also recently handled the sale of Chicago’s historic Sullivan Center, an 833,000-square-foot office building purchased by The 601W Cos., a New York-based private real estate investment and development firm, for $176 million. The sale included only the office portions of the building, the former Carson Pirie Scott department store that takes up nearly a full block and is bounded by State, Madison and Monroe streets and Wabash Avenue. The sellers, KKR and Madison Capital, had owned it for about two years.

Image courtesy of JLL