Chicago’s commercial real estate market is closing out an upside-down year in terms of the types of properties that made for the priciest deals of 2022.
In a departure from office building sales dominating the list of the Windy City’s biggest real estate trades that reflects the bludgeoning the asset class took from the pandemic and rising interest rates, the sale of a huge multifamily portfolio of small South and West Side buildings outpriced deals involving much taller downtown skyscrapers that typically top the list.
Local landlord Pangea Properties’ $600 million sale of its 7,500-unit portfolio notched the first-place spot this year and a place in Chicago history as one of the city’s biggest-ever multifamily real estate deals.
The next-largest deals for towers in the Loop hovered around $200 million, and tech giant Google’s purchase of the iconic Thompson Center, while a significant deal, falls near the bottom of the list.
While one Wacker Drive office deal for just a portion of the building’s ownership valued the property at a much higher figure, the largest amount of money that changed hands for a Chicago office building this year is half of last year’s largest deal for the Leo Burnett building, bought by Opal Holdings for $415 million.
The upended sales values are symptoms of the Chicago central business district’s slow-to-recover office market, which had a vacancy rate of more than 19 percent in the third quarter, according to a report from JLL.
Here are more details on the top 10 biggest commercial transactions that were recorded in Cook County in 2022 or otherwise confirmed by The Real Deal’s reporting. They total more than $1.8 billion.
Pangea portfolio | $600 million
New York-based Emerald Empire significantly expanded its Chicago-area holdings with its purchase of Pangea’s more than 400-building portfolio that spans the city’s South and West sides. The sale came out to a price per unit of more than $75,000.
110 North Wacker Drive | $210 million
A stake in the city’s second-most-valuable skyscraper changed hands, giving seller Howard Hughes Corp. a profitable first quarter. While word of the deal first emerged in the last week of 2021, it was finalized earlier this year. A joint venture of Chicago real estate investor Tim Callahan and New York-based Oak Hill Advisors bought a controlling stake in the 55-story tower that values it at more than $1 billion from Howard Hughes, which helped develop the property along with John O’Donnell’s Riverside Investment & Development.
801 South Financial Place | $180 million
Skokie-based American Landmark Properties and Dallas’ Evergreen Residential teamed up in June to purchase the South Loop apartment tower now known as the Elle. Atlanta-based Wood Partners was the developer and seller of the 34-story, 496-unit property.
500 Constitution Drive in Palatine | $140 million
Large apartment complexes outside city limits had a hot year. Los Angeles-based Broadshore Capital Partners made the priciest suburban Chicago multifamily trade ever in July, offloading the 612-unit Bourbon Square complex to Oak Brook’s Albion Residential at a per-unit price of $228,000.
353 North Desplaines Street | $133 million
Canadian investor Morguard added another jewel to its downtown Chicago ring with the multifamily high-rise Echelon Chicago in a summertime purchase. The Ontario-based firm bought the 39-story high-rise from Miami-based Crescent Heights, which paid $104.3 million for the 350-unit property a decade ago. It was Morguard’s fourth multifamily acquisition in downtown Chicago, as it entered the market in 2012 with a purchase of the two-tower, 848-unit Alta at K Station complex next door to Echelon. It also owns the 690-unit Marquee at Block 37 high-rise and the 515-unit Coast at Lakeshore East property at 345 East Wacker Drive.
200 West Jackson Boulevard | $130 million
New York investment firm Nightingale Properties made its grand entry into the Chicago market at the start of the year when it picked up this Class A office tower in the West Loop from a joint venture of local real estate developer White Oak Realty Partners and alternative investment firm Angelo Gordon. The 29-story, 480,000-square-foot building sits across Franklin Street from the Willis Tower.
4700 Arbor Drive in Rolling Meadows | $111 million
Another suburb, another multifamily deal: San Francisco’s FPA Multifamily sold a 662-unit apartment building in this northwest Cook County village to an affiliate of the Brooklyn-based Beitel Group in April. The sale valued each unit at more than $167,000 apiece, more than 50 percent pricier than the $72 million FPA bought the property for in 2017.
220 West Illinois Street | $105 million
Steven DeFrancis’ Cortland in July dropped $105 million on this 25-story apartment building in River North, netting seller Mapletree a 15 percent gain. Mapletree, a Singapore-based investment firm, bought the property in 2019 for $91 million.
100 West Randolph Street | $105 million
Google plans to make the 1.2-million-square-foot Thompson Center its home in 2026, after its renovation by veteran Chicago developer Mike Reschke and his partner on the venture Quintin Primo. Though the building’s spaceship-like shape is unique, its status as a struggling property in the Central Loop wasn’t, until the tech giant decided to rejuvenate the property into its Chicago centerpiece.
1454 West Randolph Street | $104 million
Naperville-based developer Marquette Cos. cashed out of this West Loop property, selling the Evo Union Park apartment building to Newport Beach, Calif.-based Pacific Life in November. The deal valued the property at $428,000 per unit.