Mansueto Properties has purchased the Wrigley Building from an investment consortium led by BDT Capital Partners. Terms of the transaction were not disclosed; however, the sales price is estimated to be $255 million, according to local media outlets.
“We are thrilled to be the new owners of this iconic Chicago and U.S. landmark property,” said Joe Mansueto, founder of Mansueto Properties and Morningstar. “Located at the new epicenter along the Chicago River, the Wrigley Building stands tall as a clear symbol of our city’s rich history. We are committed to preserving the legacy of this building and ensuring that it remains a vital part of Chicago’s growth well into the future.”
Since taking ownership in 2011, BDT Capital Partners and the ownership group invested an incremental $91 million to fund a comprehensive renovation to revitalize the building, which included modernizing the Wrigley Building’s infrastructure, redesigning the public spaces, creating amenities including a gym and tenant lounge, and redeveloping the office and retail space. Today, the building boasts more than 90 percent occupancy, transitioning from 19 percent occupancy prior to the redevelopment. They also reintroduced nearly 50,000 square feet of new and renewed retail space in the building located along the Chicago River and across from the new Apple Store on Michigan Avenue. Marquee retail tenants include Walgreens, which opened a new 32,000-square-foot flagship store featuring the Well Experience format, Peet’s Coffee and Tea, which opened a store and outdoor patio, and Ghirardelli, which opened an ice cream and chocolate shop. The ownership group’s long-term commitment enabled this successful redevelopment and revitalization of the Wrigley Building, resulting in a positive outcome for all stakeholders involved.
Sales activity in the Chicago office CBD recorded its strongest quarter since before the Great Recession, according to Cushman & Wakefield’s first quarter 2018 report. Nearly 3 million square feet of office product was sold amounting to $1 billion, an 89.4 percent increase year-over year. Equity Commonwealth sold the 1.6 million-square-foot property at 600 West Chicago Avenue to Sterling Bay for $510 million, making it the largest sale in terms of building size and dollar amount.
Cushman & Wakefield expects an additional 1.2 million square feet (65 percent vacant) of trophy tower inventory will deliver in 2018, with another 1.2 million square feet (50.4 percent vacant) expected to deliver from smaller, speculative buildings. Based on pre-leasing activity, demand has not outpaced supply. This imbalance between supply and demand, coupled with falling absorption will push the vacancy rate higher. As net effective rents level off and vacancy rises, the market may shift from an equilibrium point to being more favorable to tenants.
