Google’s Chicago HQ Fetches $257M
- Jun 30, 2016
Chicago—The 10-story office building at 1000 W. Fulton Market in Chicago’s West Loop—which serves as Google’s Midwest headquarters—has sold for $257 million after spending only a few months on the market.
American Realty Advisors of Glendale, Calif., has acquired the 531,000-square-foot 1KFulton building from Sterling Bay, which purchased the asset back in November 2012 for $12 million. The developer then went ahead and converted the former Fulton Cold Storage building into state-of-the-art offices.
The former industrial warehouse at 1000 W. Fulton was originally constructed back in 1923 in an area which used to house meatpackers and food wholesalers. A lot has changed over the course of the last 90 years, and the Fulton Market district is now a hotspot for tech companies looking for office space in the crowded city. The district is also a favorite of Sterling Bay, which acquired and redeveloped 111 N. Canal and 400 S. Jefferson in 2012 and bought Oprah Winfrey’s Harpo Studios in 2014—a location which will soon house McDonald’s new headquarters. Sterling has also recently signed a long-term lease with jobs and recruiting marketplace Glassdoor, which will move to 1330 W. Fulton St. next year.
Buyer interest in 1KFulton this year was most likely spurred by a low cap rate and affluent tenant roster, which includes SRAM, Sandbox Industries and Google. The building has earned LEED Gold certification and is also registered and pursuing WELL certification.
Though Crain’s Chicago Business initially reported the asset was set to sell for a record $305 million, American released the final details of the deal Friday morning.
“We were attracted to this asset because it has long-term leases with quality tenants, such as Google,” Martha Shelley, American’s senior portfolio manager, said in a statement. “We anticipate that this property will remain a key driver of the continued growth of the River West Fulton Marketplace over time given the abundance of street level amenities, immediate proximity of public transportation, new hotels, and housing adjacent to this asset.”
David Knapp and Stephen Livaditis of Eastdil Secured represented Sterling Bay in the transaction.
Chicago’s office market is booming—especially in the suburbs, where projects like Zurich North America’s 735,000-square-foot headquarters in Schaumburg are currently under development. Corporate expansions and relocations are expected to further fuel development in this sector, as the metro’s focus shifts from manufacturing to technology and professional services. Tech companies are mostly drawn to the River North and West Loop neighborhoods, where the high demand for large Class A office spaces tightens vacancy and drives construction, according to Marcus & Millichap’s latest Chicago office report.
Image courtesy of 1KFulton