Sterling Bay has always been at the top of the leaderboard when it comes to the real estate industry. The developer company is known for reinventing undervalued buildings, which they transform into trendy offices or viable retail spaces. And now, Sterling Bay has a bold idea to raise its profile once again after finalizing an agreement to purchase, not the usually overlooked building, but a well-established one.
The fast-growing developer started turning heads after news that it is closing in on a deal to buy the former Montgomery Ward catalog building that is located at 600 W. Chicago Avenue. The prominent building was said to have leased to the following companies:
- Lightbank – A venture capital company that focuses on disruptive technology firm investments. Brad Keywell is the Managing Partner of Lightbank, which is located in Chicago, Illinois.
- Wrigley – It is commonly known as the Wrigley Company. The Chicago-based company is a chewing gum firm that was founded on April 1, 1891.
- Echo Global Logistics – A company that delivers a technology-enabled supply chain management and transportation services. Douglas R. Waggoner is the Chairman and CEO of Echo Global Logistics.
- Groupon – An e-commerce marketplace that unites customers and local merchants by presenting daily deals at retailers, restaurants, and services providers. Rich Williams is the CEO of Groupon, which was established in 2008.
People are used to seeing Sterling Bay redevelop simple empty spaces and buildings, but it seems like the developer company is starting to look at a different perspective. Reports have suggested that the reason why Sterling Bay is now banking on acquiring well-established buildings is because they offer new services like management and leasing for other companies.
Despite offering an estimated value of more than $510 million, Sterling Bay still faces competitors that continuously bid on the 1.6-million-square-foot building. Potential buyer such as the investment and advisory company Blackstone Group also has its eyes for the catalog building.
If the deal is granted to Sterling Bay, it would definitely become one of the biggest office sales in Chicago for the year 2017.
What About the Recent Owner?
In 2011, the Equity Commonwealth, which is a real estate investment trust (REIT), owned the former Montgomery Ward catalog building. Sam Zell, a well-known real estate magnate, runs the REIT and purchased the 1.6-million-square-foot building for $390 million.
Selling the catalog building could up the game of Equity Commonwealth as it has already collected a projected amount of $2 billion in cash from retailing off scores of properties. The company is continuously shaping its portfolio down and if the deal with Sterling Bay will be approved, the Triangle Plaza is going to be the lone remaining property that REIT will have in Chicago.
More Acquisitions for Sterling Bay
Because of the amount of work and effort done by Sterling Bay, the list of companies wanting to place their confidence in the developer might grow even more. And one of which is the online retail platform, Amazon.
Amazon is currently looking for its second headquarters and Sterling Bay is bidding on it. The fast-growing developer plans to bring Amazon to its new project, which is the 70-acre Lincoln Yards. The second headquarters project is going to be one of the biggest deals in 2018.
The project is a mixed-use development on the North Side land of Chicago. The North Side land includes the former A. Finkl & Sons steel plant site. Sources mentioned that the Lincoln Yards could cost up to $10 billion to develop.
The following major cities also bids to be the destination for Amazon’s second headquarters.
- Tampa Bay, Florida
- Raleigh-Durham, North Carolina
- Atlanta, Georgia
- Washington D.C.
- Austin, Texas
- Newark, New Jersey
Sterling Bay also plans to develop a 20,000-seat stadium that is dedicated to the United Soccer League team and other sporting events, as well as exhibitions, concerts, and other entertainments.
The former Montgomery Ward is not the only well-established building that the developer company is trying to purchase at the moment. It is also closing down a $680 million purchase deal of the two-tower Prudential Plaza office complex.
Sterling Bay is a force to reckon with because amid the ongoing developments in the North Side and in the Fulton Market district, it is also accomplishing other activities like pushing new markets in Portland and Miami.
Older clients like Uber, McDonald’s, Starbucks, and Google are all living testimonies of the solid work that Sterling Bay does. And now that it is delving into a new venture, people can expect more good news. The evolution that Sterling Bay is making will definitely inspire other companies to innovate and grow even more.